What is Compelling Entry Pricing? Zeroing in on the Commercial Office Investment Sector

We are starting to see some interesting pricing opportunities and value from a counter-cyclical perspective in the commercial office sector. Log in to your MP Report Professional or MP Report Premium subscription to join in the conversations with Toby Lewis, Founder and Managing Director of Marquette Properties.?

Question 16

MP: If you are entering the commercial office investment sector now, what property attributes are you focused on, and what sort of pricing or value range?

Toby: Location, land size, multiple exit opportunities/strategies, acquisition cost relative to land/replacement cost, ongoing income. We are targeting prime and irreplaceable assets in the core of the Brisbane/Sydney CBD’s – be it office, retail, or selected specialty assets. Pricing has come off 10-30% from the 2021 highs so we see this as great value given the assets and the underlying leases remain the same.

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Question 17

MP: Where do you see the most risk in the commercial office investment sector?

Toby: Sub-prime quality and/or non-CBD/suburban products will continue to see the pressure of changing demand dynamics and the effects of the flight to quality.

Question 18

MP: Where do you see the most opportunity for investment value in the commercial office sector?

Toby: Semi-distressed and/or ‘special situations’ where sellers are being driven to sell assets because of issues unrelated to the quality of the asset itself.

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