Step Into My Office: Inside Denver’s Distressed Office Rebound

Distressed office buildings are becoming a defining part of the current market cycle, especially as higher vacancy, tighter lending conditions and slower demand continue to pressure owners. But distress does not always mean an asset is obsolete. In many cases, the challenge is financial, creating an opportunity for other buyers to reinvest and compete for tenants.

Real Capital Solutions is one of the firms taking that selective approach. With over $5.1 billion in investment since 1984, the company is targeting assets with strong fundamentals but challenged capital structures, focusing on properties that can still perform well with the right leasing strategy and repositioning.

In this episode of Step Into My Office, CPE’s Olivia Bunescu talked with Real Capital Solutions Founder & CEO Marcel Arsenault about Denver’s office reset and the firm’s approach to buying into distress. Arsenault touched on the idea that office is both an operating and a people business, what lenders still get wrong about the sector, which assets the firm is targeting and what office recovery will look like going forward.

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LISTEN TO: Step Into My Office: How Quest Workspaces Scaled in South Florida

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Here’s what they discussed:

• How’s the office market right now? (01:42)
• Office as an operating business, not a passive asset class (03:06)
• The lender pullback (05:21)
• Identifying real opportunities in distressed office (08:42)
• Financial distress vs. operational distress (11:28)
• Why is Denver different? (13:04)
• Neighborhoods and building types RCS is watching (14:38)
• Cap rates, cash flow and the role of lenders in the recovery (16:04)
• Why some obsolete office buildings may not be fixable (20:19)
• First moves after acquiring a distressed office asset (22:30)
• The outlook for Denver and the national office sector (25:19)
• Real estate is ultimately a people business (28:03)

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Music credit: Sunrise Sprint Office Beats via stocktune.com