Washington office building sold at 75% discount: ‘US real estate on fire sale’

A Washington DC office building was sold at a massive 75 per cent discount, a real estate entrepreneur said. Sharing details of the building, he said that the 175k sq ft tower at 1101 Vermont Avenue was sold for $16 million. The building was last sold for $60 million in 2006, he shared adding that the building’s assessed value in 2018 was $72 million in 2018. The entrepreneur also claimed that Washington DC has been among the hardest hit office markets in America.

On X (formerly Twitter), the entrepreneur’s post read, “Another Washington DC office building has just sold at a massive ~75% discount to what it last sold for. The 175k sq ft tower at 1101 Vermont Ave sold for $16M. The building last sold for $60M in 2006. The assessment value in 2018 was $72M in 2018. Washington DC has been among the hardest hit office markets in the US with absolutely no rebound in sight.”

Reacting to the post, Kotak Mutual Fund’s Managing Director Nilesh Shah said that the Washington DC building goes for ₹7,589 per square foot. He said, “I did this calculation twice to confirm the number. The commercial real estate in the US is truly in deflation/fire sale. Who bears all these losses?”

Commercial real estate section in the US

In the US, the commercial real estate sector has been under intense pressure. This comes amid rising interest rates over the past couple of years. In the US, prices have tumbled by 11 per cent since the Federal Reserve started raising interest rates in March 2022. Last week it was reported that an 11-story office tower in San Francisco was sold at a 60 per cent discount.

The building was bought at 60 Spear Street which is a 56-year-old office building. It was bought for $41 million from Clarion Partners that had acquired the property in 2014 for $107 million, it was reported.