Office Values Down 27% Over Last 12 Months, Apartments Drop 16%

Office property values dropped 27% during the 12 months ending in June, according to Green Street, the most of any property type. Office assets lost 6% in value in June 2023 alone.

Overall, the Green Street Commercial Property Price Index was down 11.6% compared with a year ago, and was down 0.8% for the month of June, a monthly move driven by the downward trajectory of office valuations.

“Transaction volumes are depressed as sizable bid-ask spreads persist, and debt capital remains more expensive and harder to access,” Green Street analyst Alex Boyle said in a statement.

The drop in office values is expected, as usage of the property type has remained depressed for more than three years, and overall economic turmoil has kept would-be buyers out of the market.

Major property owners across the country are trying to offload office properties, usually taking heavy losses when they do.

Only hotels haven't seen a valuation decline since June 2022, though the sector didn't see any increase in values, either. Valuations in that also sector didn't move for the month of June.

The second-steepest drop over the last 12 months has been for apartments, down 16%. Manufactured homes lost 11% and healthcare was off 10% year-over-year, Green Street reports.

By contrast, industrial only edged down 2% in valuation over the last year, and bumped upward 2% in June, according to Green Street. Every sector but office experienced no movement in valuations in June 2023.

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