RCA in the commercial property press:

Time to Buy HQ?

BusinessWeek reports: Many investors have given up on real estate. But one group has been on the prowl for property: corporations. Fully 10% of commercial real estate transactions in 2009's first half were corporations acquiring office buildings, sometimes the very ones in which they were renters, according to market tracker Real Capital Analytics. That's up from an average of 2.3% earlier in the decade, when many businesses sold their buildings—leasing the space they needed—as property values zoomed. Among those switching from tenants to owners this year: Sotheby's, which bought back its Manhattan headquarters for $390 million; and video game developer Electronic Arts, which paid $233 million for the Redwood City (Calif.) headquarters that it had always leased. Jay Koster, president of Jones Lang LaSalle's (JLL) Capital Markets, says that with many companies sitting on cash and office-property prices at 25% to 50% below 2007 peaks, such moves make sense. If values bounce back, these buyers can sell and become tenants again, banking the gains.

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Posted by: Nina Turner

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