Home News Deal for Office Space Near Big U.S. Cities Bets on Suburban Lifestyle, Remote Work

Deal for Office Space Near Big U.S. Cities Bets on Suburban Lifestyle, Remote Work

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One of the world’s largest sovereign wealth funds and its US partners are buying majority stakes in 53 suburban office buildings in a deal valued at $1.1 billion.

Singapore’s GIC Pte. The company is investing in the building with Workspace Property Trust, a privately held commercial real estate firm based in Boca Raton, Florida, according to a person familiar with the matter. The deal nearly doubles Workspace’s stake to approximately 18 million square feet. Many of the newly acquired buildings are concentrated around the Atlanta, Dallas and San Francisco Bay Areas.

The suburban office sector Pandemic hit hardVacancy rates soared in 2020 and 2021, and some properties have lost so much value that developers are tearing them down to make way for warehouses and apartments.

Workspace and GIC are betting that demand for well-located, high-end, modern suburban offices will grow as more businesses seek locations closer to where their employees live. More Americans are working from home at least part of the week, and some companies are looking to add spaces that allow employees to return to the office without having to commute far.

Workspace co-founder and CEO Thomas Rizk said:

Suburban office properties have recently suffered less than some central business districts, where vacancy rates are at record levels. U.S. downtown office vacancy surpassed suburban office vacancy in the second quarter for the first time in decades, according to CBRE Group Inc. Said.

While many suburban office buildings are outdated, big financial firms still want to invest in fully-occupied luxury properties, said co-head Jordan Roeschlaub.

newmark groupof

Brokered mortgages for purchases in debt, equity and structured finance groups.

Rizuk said vacancy rates in suburban offices are kept high by older buildings in poor locations. Rents are rising for modern properties near residential areas, shops and restaurants, he said.

When Workspace launched in 2015, Rizk said it was difficult to raise the money to buy a suburban office. At the time, many businesses were ditching sprawling, leafy office parks and moving to cities, and investors were interested in buying office towers in places like Manhattan and downtown San Francisco.

But since the pandemic began, the sector has attracted new funding.workspace last year Received $326.5 million investment From the real estate division of Oak Hill Advisors.

JP Morgan Chase

& Co. and

Bank of Montreal

has funded a deal that closed on Friday. The seller, Griffin Realty Trust Inc., holds a minority stake in the building.

write destination Conrad Petzier [email protected]

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