Sunday, June 14, 2009

Office Building Sells at 40% Below Construction Costs

by Bill McBride on 6/14/2009 08:06:00 PM

From the WSJ: Maguire Sells Office Site at 40% Off (ht Ron)

Maguire Properties Inc ... sold a newly developed office building in Irvine, Calif., for about $160 million, a price representing an estimated 40% discount to its construction cost.
...
Emmes Group of Cos. ... purchased the 19-story building, which was completed in 2007 and is about 60% leased. ...

The building ... was originally slated to be anchored by [subprime lender] New Century Financial Corp. ... The building is roughly estimated to have cost about $500 a square foot, according to Michael Knott, a senior adviser with Green Street Advisors in Newport Beach, Calif. Emmes's price was about $300 a square foot.
Quite a haircut. New Century still causing damage ...