As office occupancy remains below pre-pandemic levels, a growing group of investors is betting millions on the revival of office buildings. Menashe Properties, led by Jordan Menashe, has purchased four office properties at significant discounts, confident that demand for office space will rebound, similar to the resurgence of past fashion trends like baggy jeans. Fire sales of distressed office buildings have increased, with some properties selling at up to 97% discounts.

While some investors believe remote work is a passing trend, analysts remain cautious. MSCI’s Bryan Reid points out that structural shifts post-Covid differ from previous downturns, and many office owners face mounting debt with limited refinancing options. Despite the skepticism, investors like Menashe and Synergy’s David Greaney see opportunities, especially for well-located properties with value-add potential. Timing will be key, as major leases signed before the pandemic have yet to expire, and more distress is expected as vacancies rise.

Though the future of office space remains uncertain, opportunistic buyers see current low prices as a chance to acquire properties and reposition them for future success.

Original article posted on September 3, 2024