Distress? What Distress? 5 Office Markets Attract Top Dollar for Prime Assets Class A Office Properties

Boston, NY, DC, San Francisco & LA Thriving on Cash-Rich Investors

Written By Mark Heschmeyer in CoStar
Comment by David Repka:
benchmarking their investment by real estate standards, but as an alternative to bonds. It does not look as crazy to pay a 5.5 cap rate
when Treasuries are sub 3% and there are lease renewals offering upside
potential especially in supply constrained markets such as NYC & DC.
That 5.5 cap rate in year one may grow to an unleveraged 7.5 by year
10.">When institutional investors buy Class A to AA properties in core
markets they are not benchmarking their investment by real estate
standards, but as an alternative to bonds. It does not look as crazy to
pay a 5.5 cap rate when Treasuries are sub 3% and there are lease
renewals offering upside potential especially in supply constrained
markets such as NYC & DC. That 5.5 cap rate in year one may grow to
an unleveraged 7.5 by year 10.


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