Office towers flood the national market

The Seagram Building in New York, the Constitution Center in D.C. and the Willis Tower in Chicago

Office buildings in strong U.S. markets are entering the market with increasing frequency as owners try to cash in on rapidly rebounding prices, the Wall Street Journal reported. Recently, the Seagram Building in New York, the Constitution Center in Washington, D.C. and the Willis Tower in Chicago (formerly the Sears Tower) have hit the market, as owners hope to capitalize on high prices before the chinks in the U.S. economy become ever more apparent. Data from Real Capital Analytics reported by the Journal show $10 billion in new office listings in May, the highest monthly total since 2007. And sellers are getting lofty prices. The Journal calls the $485 sale price of 750 Seventh Avenue “surprisingly high” and notes Beacon Capital Partners’ sale of Market Square in Washington, D.C. marked a sales record at $905 per square foot. Beacon is now considering selling 1211 Sixth Avenue, which it bought for $1.5 billion in 2006. Though rents remain far below their peak — for example Midtown Manhattan is still down 35 percent — buyers are willing to pay high prices because developers didn’t overbuild in the office market during the boom and because interest rates are at historic lows. [WSJ]