Wall Street firms are raising new funds to acquire office buildings, apartments and other troubled commercial real estate at a fraction of the price investors paid a few years ago, the Wall Street Journal reported.
Cohen & Steers, Goldman Sachs, EQT Exeter and BGO, formerly known as BentallGreenOak, are among the prominent names raising billions of dollars for funds to target distressed assets and other real estate with slumping values, according to regulatory filings.
“The last few weeks, I’ve been saying, ‘holy mackerel, they’re coming out of the woodwork,’” Kevin Gannon, chief executive of Robert A. Stanger & Co., told the WSJ.
Commercial property sales have stalled until recently because most sellers haven’t been willing to cut their prices to the levels that buyers are demanding. Now, a small but growing number of office owners have begun to capitulate, unloading distressed properties.
The capitulation marks a new phase in the commercial real estate upheaval, as more beleaguered property owners turn over properties to lenders or decide to take what they can get, rather than hold out hope for an eventual recovery, reported the WSJ.
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