Property owners are starting to unload troubled office buildings at fire-sale prices, a sign that the office market slump is moving into a new phase where more landlords are ready to capitulate, the Wall Street Journal reported. In recent weeks, Blackstone sold the Griffin Towers office complex in Santa Ana for $82 million, or about 36% less than the firm paid in 2014, say people familiar with the matter. Principal Financial Group sold a Parsippany, N.J., office building for $14.3 million, down from the $52 million it paid in 2008, according to participants in the sale. The tower at 350 California in San Francisco, valued at $300 million in 2019, is expected to trade at about $60 million, or roughly 80% below that previous valuation. Office building values have steadily declined during the pandemic as shifting workplace strategies reduced demand for space and vacancies rose. Higher interest rates have also hammered the sector, making it much more difficult for landlords to refinance a property or fund the building improvements and amenities needed to attract tenants.
