The Avalanche of Deep-Discounted Office Building Sales About to Hit the Market

“Office buildings across the country are starting to trade at significant markdowns, in many cases selling for less than the value of their loan. Those types of transactions, executed in concert with the buildings’ lenders, are known as short sales. Economists at the National Bureau of Economic Research estimate that about 44% of all office properties are underwater on their loans, facing more debt than the value of their property. If a landlord were to refinance a loan that had a 3.97% interest rate, nearly a quarter of office owners would be unable to pay down the debt, the researchers found.”  Bisnow, January 28, 2024. What this may mean is as lenders and office building owners accept reality that there is no office turnaround expected over the next few years and if they leveraged their purchase and the loan is coming due it might be wiser to  cut their losses then try to salvage keeping the property. There are billions in investment monies waiting to scoop up bargain sales so one investors pain may be another investors gain…