New hope for the office market

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THE VULTURES HAVE LANDED: Is free market capitalism great, or what? Signs are already emerging that the problems in the office market are starting to fix themselves.

[A] new breed of investors is stepping in to take advantage of prices on office buildings with eye-catching discounts. Palisade Group, a new firm formed by former executives at a unit of Blackstone, acquired a two-building office property in Seattle. The price was $47.5 million, about 26% less than what it went for 20 years ago.

In downtown Los Angeles, a group of local entrepreneurs recently bought Aon Center, a 1.1 million square foot tower, for about $148 million, a super discount to the $269 million it had sold for in 2014. [Emphasis added.]

There’s nothing like a buyer with ready cash, eh? This is not so different, now that I think about it, from how the housing market received a welcome tailwind soon after the subprime crash of 2008, when speculators suddenly swooped in to start buying properties out of foreclosure when no one else either would or could. Anyway, Sam Zell would approve.