Commercial real estate owners are beginning to offload troubled office buildings at drastically reduced prices, signaling that the office market slump is entering a new phase where more landlords are ready to accept losses.
Blackstone recently sold Griffin Towers in Santa Ana for $82 million – 36% less than its 2014 purchase price – according to people familiar with the matter. Principal Financial Group also unloaded a Parsippany, NJ building for $14.3 million after paying $52 million in 2008.
The tower at 350 California Street in San Francisco was valued at approximately $300 million last year; however, it’s expected trade now will be around 80% lower than that previous valuation ($60M).
Listings of available office buildings have increased as investors seek exits from their investments: “Office inventory is growing,” said Steven Jacobs, president of online auction platform Ten-X . “Investors want out.”
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