Key Takeaways
- Post-COVID office investment requires honest assessment of structural demand changes, not cyclical recovery hopes.
- Three strategic alternatives — hold, sell, convert — should be evaluated based on forward returns, not sunk costs.
- Office-to-residential conversion can create significant value but requires specific building characteristics and development expertise.
- Negative leverage (when borrowing costs exceed property yield) is a critical warning sign requiring immediate strategic action.
- Capital preservation through a clean exit often outperforms throwing good money after bad in declining sectors.
This track contains subscriber-only lessons
Explore free tracks in this area of study, or subscribe for full access.
Browse available tracks"Institutional CRE, REITs & Post-COVID Market Dynamics" is a Pro track
Upgrade to access all lessons in this track and the entire curriculum.
Test Your Knowledge
1.When a property's borrowing cost exceeds its yield, what is this called?
2.In the case study, why was the "hold and re-lease" strategy the weakest option?
3.What principle should guide forward-looking CRE decisions?