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Improving Fundamentals Are Luring Investors Back to the Office Sector

April 06, 2022

Last Thursday, the Howard Hughes Corp. sold an equity stake in a 1.5-million-sq.-ft. office tower at 11 Wacker Drive in Chicago. At $210 million, the price of the transaction would put the valuation of the building at more than $1 billion, the highest valuation for an office building in Chicago since the sale of the Willis Tower to Blackstone in 2015. The deal marks the continuation of a trend started back toward the end of 2021, when big name investors began picking up trophy office properties at very healthy valuations.

Two years after the pandemic shut down offices around the world, many workers still have not returned full-time. “Everyone has an opinion on what ‘return to the office’ will look like, but no one really knows,” says Texas-based Russell Ingrum, vice chairman of capital markets with commercial real estate services firm CBRE. “Yet most investors remain bullish on this asset class and have determined how they want to make the office bet.”
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