Commercial buildings and especially office properties everywhere in the US are taking a major value beating. No region is exempt as vacancies soar and values plummet.
Bad news for property owners, good news for tenants.
Banker & Tradesmen reported on 9-14-09 that 667,000SF of Class A Office space, in 3 Massachusetts locations, Andover, Bedford and Billerica has been "handed back" to the Swiss bank UBS!
This modern property portfolio was purchased in 2006 for $53.6 million and the buyers took out a $58.6 million loan. Now the bank is owed $44.6 million. The owner's SEC filing showed it loss $13.8 million or 25% of the portfolio original purchase price.
Massachusetts never recovered from the DOT Com bust which sent vacancies to 40 per cent. It then rounded bounced to 20% and B&T reported that some landlord were netting $2.00 to $3.00 psf.
At the end of the 2rd Quarter, Class A office rents stood at and asking rate $18.41 psf and availability was at 22.5% per Jones LaSalle Lang.
These building offer large segments of space and are difficult to sub-divide without great expense.
We are now seeing much more retail and office supply and less to almost no demand. It's going to be a long cold winter for owners and banks with empty or nearly empty buildings.
Today many savvy, "sane" and market-aware property owners and investors are willing to negotiate and even re-negotiate deals.
Bill McInerney
Commercial Realtor
No comments:
Post a Comment