States Turn To Commercial Properties For Cash
The Associated Press reports: Political cynics often joke about statehouses being for sale to the highest bidder. These days, that's not far from the truth.
State and local governments are grappling with budget shortfalls and some are eyeing their office high-rises, prisons and even capitol buildings as assets to be sold or mortgaged for some fiscal relief.
In recent weeks, Arizona invited investors to buy bonds secured by several landmark state government buildings. Connecticut, also facing budget woes, has made plans to bring in $60 million over the next two years from real estate sales. But California, with a gaping $20 billion budget gap projected through June next year, has the most ambitious sell-off plan yet.
This month, the state will begin marketing nearly 9 million square feet of office space it values at around $2 billion.
The sales come at a time when the commercial property market is coming off its worst year in decades. Prices are down 40 percent from their peak in 2007 and are expected to fall further this year.
That bodes well for investors looking for a good deal, but not for state coffers.
Government has a history of selling real estate at an inopportune time, said Dan Fasulo, managing director of Real Capital Analytics.
"Usually there's a crisis and part of that crisis is caused by an economic downturn, which means they wind up getting lower prices when they do actually sell," he said.
View the full article on The Associated Press: States Turn To Commercial Properties For Cash
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Posted by: Mark Alferman