According to a report by the Wall Street Journal, commercial real estate owners are now starting to sell troubled office buildings at significantly discounted prices, indicating a new phase in the office market slump where more landlords are willing to give up.
In recent developments, Blackstone recently sold the Griffin Towers office complex in Santa Ana for $82 million, which is approximately 36% less than its purchase price in 2014. Similarly, Principal Financial Group sold an office building in Parsippany, NJ for $14.3 million, significantly lower than the $52 million it paid back in 2008.
Another notable example is the tower at 350 California in San Francisco, which was valued at $300 million in 2019. It is now anticipated to be traded at around $60 million, representing a substantial decline of roughly 80% from its previous valuation.
Additionally, the number of office buildings listed for sale is also on the rise, indicating a growing office inventory. Steven Jacobs, the president of Ten-X, an online auction platform, confirmed this trend, stating that "Investors want out."