Wow...Boss John, have u buy the $1 Office Building at Beekok?

[k1976]

Office Tower Deal for $1 Reveals Anxiety Among Longtime Buyers​

• Largest Canadian pension takes steps to limit office exposure
• Fund’s discounted sales may have ripple effects in the market

By Ari Altstedter and Paula Sambo
February 27, 2024 at 9:00 PM GMT+8

Canadian pension funds have been among the world’s most prolific buyers of real estate, starting a revolution that inspired retirement plans around the globe to emulate them. Now the largest of them is taking steps to limit its exposure to the most-beleaguered property type — office buildings.

Canada Pension Plan Investment Board has done three deals at discounted prices, selling its interests in a pair of Vancouver towers, a business park in Southern California and a redevelopment project in Manhattan, with the New York stake offloaded for the eyebrow-raising price of just $1.

The worry is those deals may set an example for other major investors seeking a way out of the turmoil too.

 

[k1976]

https://www.google.com/amp/s/www.bu...pension-fund-stake-property-values-2024-2?amp


The Canada Pension Plan Investment Board, the biggest pension in Canada, has completed a string of recent deals at discounted prices, including a sale of its stake in a New York building for $1, Bloomberg reported Tuesday.

Commercial real estate concerns have escalated thanks to the pandemic's work-from-home boom and high interest rates in the wake of the Federal Reserve's inflation fight, and the gravest fears center on what some described as the office apocalypse.

Office vacancies hit an all-time high in January and remote work looks like it's here to stay, darkening the outlook for investors in the space.

The Canada Pension Plan Investment Board did not immediately respond to Business Insider's request for comment.

 

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At the end of 2023, the group offloaded its 29% stake in 360 Park Avenue South for a buck, selling to one of its partners, Boston Properties, who also took on the pension's share of debt on the building, per Bloomberg. The plan at the time of purchase had been to redevelop the 20-story office building.

The pension also sold a 45% stake in Santa Monica Business Park, the report said, for $38 million at the end of last year. That represents about a 75% discount to what was paid at the time of purchase in 2018.

The Canada Pension Plan Investment Board operates a $436.9 billion fund, with a global real estate portfolio worth roughly $30.6 billion. According to the Bloomberg report, the pension isn't backing out entirely from the office real estate sector, but it's also limiting its holdings in the space.

Concerns have risen in the past year over banks and other large firms' holdings of commercial real estate investments, with spasms of volatility hitting the regional bank sector since the collapse of Silicon Valley Bank a year ago. Most recently, investors sparked a steep sell-off in shares of New York Community Bank, partly over its exposure to commercial mortgage debt.

 

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Some forecasters have floated the idea of office-to-residential conversions as a way to mitigate the office collapse while also boosting inventory for the supply-starved housing market, but that would require financing and logistics that aren't always favorable for property owners.

Goldman Sachs said it expects office vacancies to rise from 13.5% this year to 18% in the next decade. The bank's analysts wrote in a Monday note that office conversions won't be the solution for the housing shortage.

Meanwhile, Capital Economics forecasts that prices on office buildings could plunge 20% peak-to-tough, and the sector may not recover for decades.

Economists at Moody's, too, expect more pain ahead for commercial real estate.

 

[k1976]

 

[k1976]

Singapore Property Firms’ Profit Hit by High Rates, Downturn​

• Net income at CDL and CapitaLand falls more than expected
• Year was ‘extremely challenging,’ CDL executive chairman says

0:26
CapitaLand Investment's Tham On Earnings Momentum
Unmute




WATCH: CapitaLand Investment Group CFO Paul Tham reviews the company’s 2023 earnings and discusses its future plans.Source: Bloomberg
By Low De Wei and Krystal Chia
February 28, 2024 at 7:39 AM GMT+8
Updated on
February 28, 2024 at 12:40 PM GMT+8


Singapore property firms City Developments Ltd. and CapitaLand Investment Ltd. reported bigger-than-expected declines in full-year profits, after being battered by high interest rates and a global real estate downturn.

Net income at CDL dropped to S$317 million ($236 million) for the year ended December, down 75% from a record in 2022, the city-state’s largest listed developer said Wednesday. CapitaLand Investment’s profit fell 79% to S$181 million.

 

[k1976]

https://www.google.com/amp/s/www.hi...ates-global-downturn-101709086819037-amp.html


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