As the commercial real estate market improves, there are hefty profits to be made from selling properties purchased when the market was at its nadir, the Wall Street Journal reported. Now, the values of prime properties, which fell 38 percent in the recession’s early years, are within 4 percent of the highs recorded in 2007. Increased values are tied to ever-lower interest rates and more readily available credit.
In a turn-around, midsize commercial real estate players that bought properties at the bottom are the ones selling today, as opposed to bigger names like Starwood and Blackstone, which made similar moves in the 1990s. For example, George Comfort & Sons, the landlord that bought the 1.8 million-square-foot Worldwide Plaza in 2009 for $600 million, is poised to get the largest profit on a building purchased in the recession.
George Comfort has already received bids over $1 billion; its target is $1.5 billion. Final bids for the office building are due on Friday. [WSJ]