{"id":1004757868,"date":"2025-05-14T00:37:14","date_gmt":"2025-05-14T08:37:14","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004757868"},"modified":"2025-06-16T01:50:05","modified_gmt":"2025-06-16T09:50:05","slug":"whos-buying-distressed-office-buildings","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/whos-buying-distressed-office-buildings\/","title":{"rendered":"Who\u2019s Buying Distressed Office Buildings?"},"content":{"rendered":"\n<p><\/p>\n\n\n<div class=\"wp-block-image\">\n<figure data-wp-context=\"{&quot;imageId&quot;:&quot;6a08fa7b88614&quot;}\" data-wp-interactive=\"core\/image\" class=\"alignright size-full is-resized wp-lightbox-container\"><img loading=\"lazy\" decoding=\"async\" width=\"640\" height=\"800\" data-attachment-id=\"1004757869\" data-permalink=\"https:\/\/www.commercialsearch.com\/news\/whos-buying-distressed-office-buildings\/pruneyard-tower-i\/\" data-orig-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/05\/Pruneyard-Tower-I.jpg\" data-orig-size=\"640,800\" data-comments-opened=\"0\" data-image-meta=\"{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;0&quot;,&quot;copyright&quot;:&quot;\\u00a9 Yardi Systems, Inc.&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;,&quot;orientation&quot;:&quot;0&quot;}\" data-image-title=\"Pruneyard Tower I\" data-image-description=\"\" data-image-caption=\"\" data-large-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/05\/Pruneyard-Tower-I.jpg?w=640\" data-wp-class--hide=\"state.isContentHidden\" data-wp-class--show=\"state.isContentVisible\" data-wp-init=\"callbacks.setButtonStyles\" data-wp-on-async--click=\"actions.showLightbox\" data-wp-on-async--load=\"callbacks.setButtonStyles\" data-wp-on-async-window--resize=\"callbacks.setButtonStyles\" src=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/05\/Pruneyard-Tower-I.jpg\" alt=\"Exterior shot of Pruneyard Tower I in Cambpell, Calif.\" class=\"wp-image-1004757869\" style=\"width:300px\" srcset=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/05\/Pruneyard-Tower-I.jpg 640w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/05\/Pruneyard-Tower-I.jpg?resize=240,300 240w\" sizes=\"auto, (max-width: 640px) 100vw, 640px\" \/><button\n\t\t\tclass=\"lightbox-trigger\"\n\t\t\ttype=\"button\"\n\t\t\taria-haspopup=\"dialog\"\n\t\t\taria-label=\"Enlarge\"\n\t\t\tdata-wp-init=\"callbacks.initTriggerButton\"\n\t\t\tdata-wp-on-async--click=\"actions.showLightbox\"\n\t\t\tdata-wp-style--right=\"state.imageButtonRight\"\n\t\t\tdata-wp-style--top=\"state.imageButtonTop\"\n\t\t>\n\t\t\t<svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"12\" height=\"12\" fill=\"none\" viewBox=\"0 0 12 12\">\n\t\t\t\t<path fill=\"#fff\" d=\"M2 0a2 2 0 0 0-2 2v2h1.5V2a.5.5 0 0 1 .5-.5h2V0H2Zm2 10.5H2a.5.5 0 0 1-.5-.5V8H0v2a2 2 0 0 0 2 2h2v-1.5ZM8 12v-1.5h2a.5.5 0 0 0 .5-.5V8H12v2a2 2 0 0 1-2 2H8Zm2-12a2 2 0 0 1 2 2v2h-1.5V2a.5.5 0 0 0-.5-.5H8V0h2Z\" \/>\n\t\t\t<\/svg>\n\t\t<\/button><figcaption class=\"wp-element-caption\">The Pruneyard office campus in Campbell, Calif., traded this year at a more than 60 percent discount. <em>Image courtesy of CommercialEdge<\/em><\/figcaption><\/figure><\/div>\n\n\n<p>Distressed office assets are distressed for a reason. Those acquiring them face inherent risk. <\/p>\n\n\n\n<p>Yet, many such properties are continuing to find buyers, and broad categories of investors are displaying steadily rising appetite for the class. They\u2019re willing to take on the challenge for what they see as sizable opportunity.<\/p>\n\n\n\n<p>\u201cToday\u2019s office market is being reshaped by private capital investors taking advantage of historic discounts,\u201d said Lukas Krause, CEO of SVN International Corp. <\/p>\n\n\n\n<p>\u201cWith a focus on distressed and value-add opportunities in resilient urban cores and fast-growing metros, the trend signals a belief in the long-term recovery and relevance of office space, albeit repositioned to meet the evolving needs of the future workforce,\u201d Krause continued.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-value-add-opportunity-in-distressed-office\">Value-add opportunity in distressed office<\/h2>\n\n\n\n<p>The <a href=\"https:\/\/www.commercialsearch.com\/news\/investors-seeking-office-bargains-are-finding-them\/\">top areas for distressed office<\/a> acquisitions are major CBDs in primary markets with robust fundamentals and historical resilience, Krause said. Sun Belt metros are also garnering strong interest based on their continuing population and employment growth.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure data-wp-context=\"{&quot;imageId&quot;:&quot;6a08fa7b89aa4&quot;}\" data-wp-interactive=\"core\/image\" class=\"alignleft size-full is-resized wp-lightbox-container\"><img loading=\"lazy\" decoding=\"async\" width=\"680\" height=\"544\" data-attachment-id=\"1004757887\" data-permalink=\"https:\/\/www.commercialsearch.com\/news\/whos-buying-distressed-office-buildings\/lukas-krause\/\" data-orig-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/05\/Lukas-Krause.jpg\" data-orig-size=\"680,544\" data-comments-opened=\"0\" data-image-meta=\"{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;0&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;,&quot;orientation&quot;:&quot;0&quot;}\" data-image-title=\"Lukas Krause\" data-image-description=\"\" data-image-caption=\"\" data-large-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/05\/Lukas-Krause.jpg?w=680\" data-wp-class--hide=\"state.isContentHidden\" data-wp-class--show=\"state.isContentVisible\" data-wp-init=\"callbacks.setButtonStyles\" data-wp-on-async--click=\"actions.showLightbox\" data-wp-on-async--load=\"callbacks.setButtonStyles\" data-wp-on-async-window--resize=\"callbacks.setButtonStyles\" src=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/05\/Lukas-Krause.jpg\" alt=\"Headshot of Lukas Krause, SVN\" class=\"wp-image-1004757887\" style=\"width:400px\" srcset=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/05\/Lukas-Krause.jpg 680w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/05\/Lukas-Krause.jpg?resize=300,240 300w\" sizes=\"auto, (max-width: 680px) 100vw, 680px\" \/><button\n\t\t\tclass=\"lightbox-trigger\"\n\t\t\ttype=\"button\"\n\t\t\taria-haspopup=\"dialog\"\n\t\t\taria-label=\"Enlarge\"\n\t\t\tdata-wp-init=\"callbacks.initTriggerButton\"\n\t\t\tdata-wp-on-async--click=\"actions.showLightbox\"\n\t\t\tdata-wp-style--right=\"state.imageButtonRight\"\n\t\t\tdata-wp-style--top=\"state.imageButtonTop\"\n\t\t>\n\t\t\t<svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"12\" height=\"12\" fill=\"none\" viewBox=\"0 0 12 12\">\n\t\t\t\t<path fill=\"#fff\" d=\"M2 0a2 2 0 0 0-2 2v2h1.5V2a.5.5 0 0 1 .5-.5h2V0H2Zm2 10.5H2a.5.5 0 0 1-.5-.5V8H0v2a2 2 0 0 0 2 2h2v-1.5ZM8 12v-1.5h2a.5.5 0 0 0 .5-.5V8H12v2a2 2 0 0 1-2 2H8Zm2-12a2 2 0 0 1 2 2v2h-1.5V2a.5.5 0 0 0-.5-.5H8V0h2Z\" \/>\n\t\t\t<\/svg>\n\t\t<\/button><figcaption class=\"wp-element-caption\">Some investors see the huge discounts as cushions allowing for repositioning or value-enhancement strategies, said Lukas Krause of SVN. <em>Image courtesy of SVN International Corp.<\/em><\/figcaption><\/figure><\/div>\n\n\n<p>Decidedly distinct from Class A assets that are high quality, well situated and require little repositioning, the distressed assets being sought are high-vacancy or deferred-maintenance buildings that offer value-add opportunities for those investors inclined to deploy capital in upgrading and re-leasing strategies. They view the huge discounts as cushions allowing for repositioning or value-enhancement strategies. Sellers, Krause added, tend to be \u201cinstitutional investors, including pension funds and investment managers, divesting underperforming or non-core assets to rebalance their portfolios\u201d<\/p>\n\n\n\n<p>Buyers and sellers of distressed office buildings vary building by building, micro-market by micro-market, reported Benjamin Adams, CEO of Ten Capital Management, which played a key role in last year\u2019s acquisition of The Townsend Group from Aon.<\/p>\n\n\n\n<p>\u201cOne of the more confusing things about the after-effect of the pandemic is that there has been a complete fractionalization in the asset class,\u201d Adams said.<\/p>\n\n\n\n<p>While there have been some core-plus trades, they tended to be few and far between, with lease roll stickier and longer-term, and the post-Covid downsizing trend fully realized. Transaction volumes remain, in general, very low.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity has-very-light-gray-to-cyan-bluish-gray-gradient-background has-background is-style-wide\"\/>\n\n\n\n<p><strong>READ ALSO:<\/strong> <a href=\"https:\/\/www.commercialsearch.com\/news\/commercialedge-office-report-february-2025\/\">Office Prices Slide as Discounts Surge<\/a><\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity has-very-light-gray-to-cyan-bluish-gray-gradient-background has-background is-style-wide\"\/>\n\n\n\n<p>\u201cWe are seeing <a href=\"https:\/\/www.commercialsearch.com\/news\/wealth-surge-drives-family-office-growth-evolution\/\">a lot of family offices participate<\/a> in the middle markets, particularly in note sales,\u201d Adams said. \u201cThey have the benefit of being able to take a longer-term view. A conventional closed-end fund with constraints on an investment period often can\u2019t do that. Family offices also can be very quick to act and are probably more comfortable with the risk of limited to no contingencies or due diligence in a note sale environment.\u201d<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-private-capital-buying-distressed-office\">Private capital buying distressed office<\/h2>\n\n\n<div class=\"wp-block-image\">\n<figure data-wp-context=\"{&quot;imageId&quot;:&quot;6a08fa7b8cb9d&quot;}\" data-wp-interactive=\"core\/image\" class=\"alignright size-large is-resized wp-lightbox-container\"><img loading=\"lazy\" decoding=\"async\" data-attachment-id=\"1004757883\" data-permalink=\"https:\/\/www.commercialsearch.com\/news\/sonny-ginsberg-2\/\" data-orig-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/05\/Sonny-Ginsberg-edited.jpg\" data-orig-size=\"4716,3539\" data-comments-opened=\"0\" data-image-meta=\"{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;0&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;,&quot;orientation&quot;:&quot;1&quot;}\" data-image-title=\"Sonny Ginsberg\" data-image-description=\"\" data-image-caption=\"\" data-large-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/05\/Sonny-Ginsberg-edited.jpg?w=1024\" data-wp-class--hide=\"state.isContentHidden\" data-wp-class--show=\"state.isContentVisible\" data-wp-init=\"callbacks.setButtonStyles\" data-wp-on-async--click=\"actions.showLightbox\" data-wp-on-async--load=\"callbacks.setButtonStyles\" data-wp-on-async-window--resize=\"callbacks.setButtonStyles\" height=\"768\" width=\"1024\" src=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/05\/Sonny-Ginsberg-edited.jpg\" alt=\"Headshot of Steven \u201cSonny\u201d Ginsberg, partner at CRE law firm Ginsberg Jacobs LLC\" class=\"wp-image-1004757883\" style=\"width:400px\" srcset=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/05\/Sonny-Ginsberg-edited.jpg 4716w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/05\/Sonny-Ginsberg-edited.jpg?resize=300,225 300w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/05\/Sonny-Ginsberg-edited.jpg?resize=768,576 768w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/05\/Sonny-Ginsberg-edited.jpg?resize=1024,768 1024w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/05\/Sonny-Ginsberg-edited.jpg?resize=1536,1153 1536w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/05\/Sonny-Ginsberg-edited.jpg?resize=2048,1537 2048w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><button\n\t\t\tclass=\"lightbox-trigger\"\n\t\t\ttype=\"button\"\n\t\t\taria-haspopup=\"dialog\"\n\t\t\taria-label=\"Enlarge\"\n\t\t\tdata-wp-init=\"callbacks.initTriggerButton\"\n\t\t\tdata-wp-on-async--click=\"actions.showLightbox\"\n\t\t\tdata-wp-style--right=\"state.imageButtonRight\"\n\t\t\tdata-wp-style--top=\"state.imageButtonTop\"\n\t\t>\n\t\t\t<svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"12\" height=\"12\" fill=\"none\" viewBox=\"0 0 12 12\">\n\t\t\t\t<path fill=\"#fff\" d=\"M2 0a2 2 0 0 0-2 2v2h1.5V2a.5.5 0 0 1 .5-.5h2V0H2Zm2 10.5H2a.5.5 0 0 1-.5-.5V8H0v2a2 2 0 0 0 2 2h2v-1.5ZM8 12v-1.5h2a.5.5 0 0 0 .5-.5V8H12v2a2 2 0 0 1-2 2H8Zm2-12a2 2 0 0 1 2 2v2h-1.5V2a.5.5 0 0 0-.5-.5H8V0h2Z\" \/>\n\t\t\t<\/svg>\n\t\t<\/button><figcaption class=\"wp-element-caption\">Steven \u201cSonny\u201d Ginsberg, partner at CRE law firm Ginsberg Jacobs LLC, reminded us of the inherent risk involved in buying distressed assets. <em>Image courtesy of Ginsberg Jacobs LLC<\/em><\/figcaption><\/figure><\/div>\n\n\n<p>Private capital entities, such as private equity firms, family offices and high-net-worth individuals, are one type of buyer Krause sees. Such investors are taking advantage of price reductions from prior valuations, and particularly so in primary markets accustomed to resilience and recovery after downturns. Private equity firms are actively investing in discounted office assets, aiming for turnaround and value creation. Family offices and high-net-worth individuals are pursuing undervalued assets with an eye toward long-term appreciation and consistent income streams, he said.<\/p>\n\n\n\n<p>Another buyer type is the owner-occupier or owner-user, represented by firms seeking greater control over their workspaces and increasingly acquiring offices rather than leasing, especially when acquisition costs decline below new construction expenses.<\/p>\n\n\n\n<p>In each case, \u201cThese investors are motivated by the potential to reposition assets through leasing strategies, property improvements and riding the eventual wave of market recovery,\u201d Krause mentioned.<\/p>\n\n\n\n<p>Among prospective owner-operators or owner-users are health-care industry professionals, including physicians and dentists, said Sandip Sachar of DDS, a New York City dentist with a 20-year-plus general dental practice, Sachar Dental, in Manhattan. The high-interest rate era following the pandemic unleashed opportunities for doctors and dentists to acquire their buildings and medical condos, she said. <\/p>\n\n\n<div class=\"wp-block-image\">\n<figure data-wp-context=\"{&quot;imageId&quot;:&quot;6a08fa7b8d370&quot;}\" data-wp-interactive=\"core\/image\" class=\"alignleft size-large is-resized wp-lightbox-container\"><img loading=\"lazy\" decoding=\"async\" width=\"640\" height=\"480\" data-attachment-id=\"1004754235\" data-permalink=\"https:\/\/www.commercialsearch.com\/news\/1022-w-maude-ave-in-sunnyvale-calif-2\/\" data-orig-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/04\/1022-W-Maude-Ave.-in-Sunnyvale-Calif-edited.jpg\" data-orig-size=\"640,480\" data-comments-opened=\"0\" data-image-meta=\"{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;0&quot;,&quot;copyright&quot;:&quot;\\u00a9 Yardi Systems, Inc.&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;,&quot;orientation&quot;:&quot;0&quot;}\" data-image-title=\"1022 W Maude Ave. in Sunnyvale, Calif.\" data-image-description=\"\" data-image-caption=\"\" data-large-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/04\/1022-W-Maude-Ave.-in-Sunnyvale-Calif-edited.jpg?w=640\" data-wp-class--hide=\"state.isContentHidden\" data-wp-class--show=\"state.isContentVisible\" data-wp-init=\"callbacks.setButtonStyles\" data-wp-on-async--click=\"actions.showLightbox\" data-wp-on-async--load=\"callbacks.setButtonStyles\" data-wp-on-async-window--resize=\"callbacks.setButtonStyles\" src=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/04\/1022-W-Maude-Ave.-in-Sunnyvale-Calif-edited.jpg?w=640\" alt=\"Exterior shot of the 120,000-square-foot research and development office building at 1022 W Maude Ave. in Sunnyvale, Calif.\" class=\"wp-image-1004754235\" style=\"width:400px\" srcset=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/04\/1022-W-Maude-Ave.-in-Sunnyvale-Calif-edited.jpg 640w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/04\/1022-W-Maude-Ave.-in-Sunnyvale-Calif-edited.jpg?resize=300,225 300w\" sizes=\"auto, (max-width: 640px) 100vw, 640px\" \/><button\n\t\t\tclass=\"lightbox-trigger\"\n\t\t\ttype=\"button\"\n\t\t\taria-haspopup=\"dialog\"\n\t\t\taria-label=\"Enlarge\"\n\t\t\tdata-wp-init=\"callbacks.initTriggerButton\"\n\t\t\tdata-wp-on-async--click=\"actions.showLightbox\"\n\t\t\tdata-wp-style--right=\"state.imageButtonRight\"\n\t\t\tdata-wp-style--top=\"state.imageButtonTop\"\n\t\t>\n\t\t\t<svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"12\" height=\"12\" fill=\"none\" viewBox=\"0 0 12 12\">\n\t\t\t\t<path fill=\"#fff\" d=\"M2 0a2 2 0 0 0-2 2v2h1.5V2a.5.5 0 0 1 .5-.5h2V0H2Zm2 10.5H2a.5.5 0 0 1-.5-.5V8H0v2a2 2 0 0 0 2 2h2v-1.5ZM8 12v-1.5h2a.5.5 0 0 0 .5-.5V8H12v2a2 2 0 0 1-2 2H8Zm2-12a2 2 0 0 1 2 2v2h-1.5V2a.5.5 0 0 0-.5-.5H8V0h2Z\" \/>\n\t\t\t<\/svg>\n\t\t<\/button><figcaption class=\"wp-element-caption\">LinkedIn&#8217;s recently acquired 1022 W. Maude Ave. in Sunnyvale, Calif. <em>Image courtesy of CommercialEdge<\/em><\/figcaption><\/figure><\/div>\n\n\n<p>\u201cInterestingly, young doctors still cannot afford Manhattan real estate, and older doctors, close to retirement, do not have the desire to purchase at this point,\u201d she added. \u201cThere is a sweet spot of doctors in practice for 10 to 20 years with enough capital and enough foresight to invest in real estate, and still having the years left to benefit from the ownership and appreciation of their asset.\u201d<\/p>\n\n\n\n<p>In Miami, two types of distressed office buyers are dominating, said Holly MacDonald-Korth, CEO of KDM Financial. One category includes owner-users locking in opportunistic pricing. The other comprises developers seeking to convert distressed office buildings into multifamily or mixed-use. <\/p>\n\n\n\n<p>\u201cWhat\u2019s interesting is that with housing demand on the rise, underutilized offices, especially in the urban core and outer suburbs, are becoming attractive to the smart money,\u201d she added. \u201cThese areas are typically housing constrained, and offer a great opportunity for creative developers to turn an underutilized property into housing or a mixed-use project.\u201d<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-out-west\">Out West<\/h2>\n\n\n<div class=\"wp-block-image\">\n<figure data-wp-context=\"{&quot;imageId&quot;:&quot;6a08fa7b8e00f&quot;}\" data-wp-interactive=\"core\/image\" class=\"alignright size-full is-resized wp-lightbox-container\"><img loading=\"lazy\" decoding=\"async\" width=\"400\" height=\"400\" data-attachment-id=\"1004757894\" data-permalink=\"https:\/\/www.commercialsearch.com\/news\/whos-buying-distressed-office-buildings\/robin-santiago\/\" data-orig-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/05\/Robin-Santiago.jpg\" data-orig-size=\"400,400\" data-comments-opened=\"0\" data-image-meta=\"{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;0&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;,&quot;orientation&quot;:&quot;0&quot;}\" data-image-title=\"Robin Santiago\" data-image-description=\"\" data-image-caption=\"\" data-large-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/05\/Robin-Santiago.jpg?w=400\" data-wp-class--hide=\"state.isContentHidden\" data-wp-class--show=\"state.isContentVisible\" data-wp-init=\"callbacks.setButtonStyles\" data-wp-on-async--click=\"actions.showLightbox\" data-wp-on-async--load=\"callbacks.setButtonStyles\" data-wp-on-async-window--resize=\"callbacks.setButtonStyles\" src=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/05\/Robin-Santiago.jpg\" alt=\"Headshot of Robin Santiago, SVN\" class=\"wp-image-1004757894\" style=\"width:400px\" srcset=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/05\/Robin-Santiago.jpg 400w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/05\/Robin-Santiago.jpg?resize=150,150 150w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/05\/Robin-Santiago.jpg?resize=300,300 300w\" sizes=\"auto, (max-width: 400px) 100vw, 400px\" \/><button\n\t\t\tclass=\"lightbox-trigger\"\n\t\t\ttype=\"button\"\n\t\t\taria-haspopup=\"dialog\"\n\t\t\taria-label=\"Enlarge\"\n\t\t\tdata-wp-init=\"callbacks.initTriggerButton\"\n\t\t\tdata-wp-on-async--click=\"actions.showLightbox\"\n\t\t\tdata-wp-style--right=\"state.imageButtonRight\"\n\t\t\tdata-wp-style--top=\"state.imageButtonTop\"\n\t\t>\n\t\t\t<svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"12\" height=\"12\" fill=\"none\" viewBox=\"0 0 12 12\">\n\t\t\t\t<path fill=\"#fff\" d=\"M2 0a2 2 0 0 0-2 2v2h1.5V2a.5.5 0 0 1 .5-.5h2V0H2Zm2 10.5H2a.5.5 0 0 1-.5-.5V8H0v2a2 2 0 0 0 2 2h2v-1.5ZM8 12v-1.5h2a.5.5 0 0 0 .5-.5V8H12v2a2 2 0 0 1-2 2H8Zm2-12a2 2 0 0 1 2 2v2h-1.5V2a.5.5 0 0 0-.5-.5H8V0h2Z\" \/>\n\t\t\t<\/svg>\n\t\t<\/button><figcaption class=\"wp-element-caption\">Robin Santiago, managing director with SVN, pointed out many examples of owner-operators into the distressed office space. <em>Image courtesy of SVN International Corp.<\/em><\/figcaption><\/figure><\/div>\n\n\n<p>On the West Coast, Robin Santiago, managing director of the SVN Capital West Partners office in San Jose, Calif., reported most distressed office building buyers have been owner-operators seeking long-term control over their real estate, frequently at discounted pricing.<\/p>\n\n\n\n<p>The largest Bay Area transactions of the past year by dollar volume were the recent acquisition by Microsoft of its 643,000-square-foot campus in Mountain View in a $330 million all-cash transaction and the recent expenditure of $374 million by NVIDIA for a seven-building, 626,000-square-foot property. <a href=\"https:\/\/www.commercialsearch.com\/news\/linkedin-buys-silicon-valley-asset-for-75m\/\">LinkedIn recently paid $75 million<\/a> for a Sunnyvale building it had previously leased. On the investment side, San Francisco-based PSAI Realty Partners purchased a three-building trophy office campus in Campbell, Calif. for $54 million, a <a href=\"https:\/\/www.siliconvalley.com\/2025\/03\/03\/south-bay-campbell-economy-office-property-build-real-estate-develop\/\">more than 60 percent discount<\/a> from its previous sale price.<\/p>\n\n\n\n<p>Meanwhile, Silicon Valley-based South Bay Development purchased a seven-building, 406,000-square- foot development named The Quad. Its approximately $51 million price tag was discounted by 66 percent compared to its previous sales price, Santiago said.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-caveat-emptor\">Caveat emptor<\/h2>\n\n\n\n<p>Though in many cases offering acquisitions at deeply slashed sale prices, distressed deals are not without serious risk. That\u2019s the earnest reminder of Steven \u201cSonny\u201d Ginsberg, partner at CRE law firm Ginsberg Jacobs LLC.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure data-wp-context=\"{&quot;imageId&quot;:&quot;6a08fa7b8eb92&quot;}\" data-wp-interactive=\"core\/image\" class=\"alignleft size-large is-resized wp-lightbox-container\"><img loading=\"lazy\" decoding=\"async\" width=\"689\" height=\"517\" data-attachment-id=\"1004757881\" data-permalink=\"https:\/\/www.commercialsearch.com\/news\/ss-headshot-v05-2\/\" data-orig-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/05\/SS-Headshot-V05-edited.jpg\" data-orig-size=\"689,517\" data-comments-opened=\"0\" data-image-meta=\"{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;0&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;,&quot;orientation&quot;:&quot;1&quot;}\" data-image-title=\"SS Headshot V05\" data-image-description=\"\" data-image-caption=\"\" data-large-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/05\/SS-Headshot-V05-edited.jpg?w=689\" data-wp-class--hide=\"state.isContentHidden\" data-wp-class--show=\"state.isContentVisible\" data-wp-init=\"callbacks.setButtonStyles\" data-wp-on-async--click=\"actions.showLightbox\" data-wp-on-async--load=\"callbacks.setButtonStyles\" data-wp-on-async-window--resize=\"callbacks.setButtonStyles\" src=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/05\/SS-Headshot-V05-edited.jpg\" alt=\"Headshot of Sandip Sachar, Manhattan dentist\" class=\"wp-image-1004757881\" style=\"width:400px\" srcset=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/05\/SS-Headshot-V05-edited.jpg 689w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/05\/SS-Headshot-V05-edited.jpg?resize=300,225 300w\" sizes=\"auto, (max-width: 689px) 100vw, 689px\" \/><button\n\t\t\tclass=\"lightbox-trigger\"\n\t\t\ttype=\"button\"\n\t\t\taria-haspopup=\"dialog\"\n\t\t\taria-label=\"Enlarge\"\n\t\t\tdata-wp-init=\"callbacks.initTriggerButton\"\n\t\t\tdata-wp-on-async--click=\"actions.showLightbox\"\n\t\t\tdata-wp-style--right=\"state.imageButtonRight\"\n\t\t\tdata-wp-style--top=\"state.imageButtonTop\"\n\t\t>\n\t\t\t<svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"12\" height=\"12\" fill=\"none\" viewBox=\"0 0 12 12\">\n\t\t\t\t<path fill=\"#fff\" d=\"M2 0a2 2 0 0 0-2 2v2h1.5V2a.5.5 0 0 1 .5-.5h2V0H2Zm2 10.5H2a.5.5 0 0 1-.5-.5V8H0v2a2 2 0 0 0 2 2h2v-1.5ZM8 12v-1.5h2a.5.5 0 0 0 .5-.5V8H12v2a2 2 0 0 1-2 2H8Zm2-12a2 2 0 0 1 2 2v2h-1.5V2a.5.5 0 0 0-.5-.5H8V0h2Z\" \/>\n\t\t\t<\/svg>\n\t\t<\/button><figcaption class=\"wp-element-caption\">There&#8217;s one niche, very specific category of office buyers out there: doctors. \u201cThere is a sweet spot of doctors in practice for 10 to 20 years with enough capital and enough foresight to invest in real estate,&#8221; said Sandip Sachar, longtime New York City dentist. <em>Image courtesy of Sandip Sachar<\/em><\/figcaption><\/figure><\/div>\n\n\n<p>\u201cUsually, the discounted property is being sold at the direction of a lender, whether through a short sale, by a receiver or post-foreclosure or deed in lieu,\u201d Ginsberg said.<\/p>\n\n\n\n<p>\u201cIf a lender is the seller, they\u2019ll have very limited representations. If the lender is not the seller, their reps may not be worth anything, as the selling entity will be receiving little or no equity from the sale. And a lender is unlikely to allow a holdback to secure any reps regardless of who the actual seller is. &#8230; That puts more focus on buyer due diligence, which may also need to be performed timely and at the buyer\u2019s sole cost.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<p>There&#8217;s both pain and relief in the market. Here&#8217;s who&#8217;s seizing the moment.<\/p>\n","protected":false},"author":450,"featured_media":1004757885,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21808,21783,23891,21742,21747,51037],"tags":[42830,52622,33330,38386],"class_list":["post-1004757868","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-investment","category-national","category-latest","category-office","category-trends","tag-ginsberg-jacobs-llc","tag-kdm-financial","tag-svn","tag-ten-capital-management"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v23.4 (Yoast SEO v24.6) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Distressed Office Buildings: Who&#039;s Buying? - Commercial Property Executive<\/title>\n<meta name=\"description\" content=\"There&#039;s opportunity in the distressed office market, and money is flowing for the right product. 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