Office tower prices tumble again
There were signs right up until the end of 2009 that commercial real estate prices might finally be stabilizing after a decline that has rivaled the residential market bloodbath.
But the road to recovery looks like it will be a long and winding one, with more signs of trouble emerging.
An index put out by the MIT Center for Real Estate finds major institutional investors took a nearly 5 percent hit on prices of office buildings and other properties sold in the fourth quarter.
That brings commercial prices to a new low after signs in the third quarter that office tower values might finally be on the mend, according to MIT’s real estate experts.
Emblematic of the sector’s continued woes was the recent sale by the Mortgage Bankers Association of its Washington headquarters for just over $41 million.
The only problem, of course, is the trade group shelled out nearly $80 million for the 10-story building near the White House just back in 2007.
A classic short sale, it’s not clear whether the mortgage bankers will pay back all of the $30 million is still owes on the property, The Wall Street Journal reports.