1,75,000 sq ft tower at 1101 Vermont Avenue sold for $16 million
As workplace trends continue to shift post-pandemic, the U.S. office real estate industry has been hit hard. Vacancy rates for office buildings in the country are rising and leasing activity is declining due to the ongoing shift to remote and hybrid work models. Washington, D.C., is one of the hardest-hit office markets in the country. Even prime commercial real estate office buildings in New York City are facing significant distress and loss of value. As a result, office spaces that have become outdated are now being sold at deep discounts.
A real estate entrepreneur posted on X that an office building in Washington, D.C., was for sale at a 75% discount. The 1,75,000-square-foot tower at 1101 Vermont Avenue is for sale for $16 million, he said, adding that the building was last sold in 2006 for $60 million. Surprisingly, the building’s assessed value in 2018 was $72 million.
“Another office building in Washington, D.C. just sold for a hefty discount of about 75% from its last sale price. The 175,000-square-foot tower at 1101 Vermont Ave. sold for $16 million. The building last sold for $60 million Dollar price sold in 2006 and had a 2018 assessed value of $72 million,” he wrote while sharing a photo of the building.
See the post here:
JUST IN: Another office building in Washington, D.C. just sold for a hefty discount of about 75% from its last sale price
175,000-square-foot tower at 1101 Vermont Ave. sells for $16 million
The building last sold for $60 million in 2006
Appraised value in 2018 was $72 million
Washington, D.C. has… pic.twitter.com/LXO2JN3XKF
— Triple Net Investor (@TripleNetInvest) March 31, 2024
Nilesh Shah, Managing Director of Kotak Mutual Fund, responded to the post and said that the Washington DC building was sold at Rs 7,589 per sq ft, which is 73% lower than the last transaction price 18 years ago.
“I did the math twice to confirm this number. Commercial real estate in the U.S. is indeed in a deflation/fire sale situation. Who bears all these losses?” he added.
Recently, an office building in New York’s upscale Manhattan district was sold at a 70% discount, which shocked many people. Industrialist Uday Kotak also expressed surprise at the sharp interest rate cut for Manhattan real estate. “Wow, that’s less than half of BKC in Mumbai,” he wrote.
The report shows that the average listing price of U.S. office buildings is US$37.83, a year-on-year decrease of 1.2%.