The office sector continues to face a litany of challenges with elevated occupancies, obsolete buildings and constrained liquidity from debt markets. On the other side of the coin is a rare opportunity to acquire high-quality assets at steeply discounted prices.
“A lot of investors today have drawn a big X across office as a product type for investment. We’re not afraid of office. And, in many ways, we look at office as perhaps being one of the best investment opportunities in terms of the product profiles,” says Joe Gorin, head of U.S. and European real estate investing at Barings.
Fundamental real estate investors focus on investing at discounts to replacement cost and higher spreads relative to risk-free rates. From that perspective, there’s an argument to say there’s no better opportunity today than in acquiring office assets. However, office also is one of the most complicated product types because it has become a highly differentiated sector, from top-p
