Monday, July 6, 2009

San Fran Office Building Sells for 75% Below Replacement Cost

Courtesy of Calculated Risk comes a surprising bad headline, Sale shows San Francisco property values in free fall:

A downtown San Francisco office building that sold for $400 a square foot in 2006 has traded for just $172 a square foot, a 57 percent decline that industry experts see as an important milestone in establishing new, recession-era values for financial district property. . .

The sale, at a price that represents about 25 percent of replacement cost, represents the first San Francisco office building sale in a year. It is also the first “round trip” transaction where a property went from being sold at the peak of the market to deed in lieu of foreclosure to a new owner. Colliers International Executive Vice President Tony Crossley said the price “gives the market a data point it has been lacking.”

“This gives a benchmark that other owners and lenders can point to as saying this is what real estate is now worth in San Francisco and can adjust to accordingly. People can now look at their own building and say with more certainty what it is worth. It takes the nonsense out of it,” he said.

The article does not say when the building was built, whether its needs renovations, etc.

Copyright (C) Long Lake LLC 2009

No comments:

Post a Comment