The Commercial Real Estate Alpha Site

Fears in office space

Canadian pension funds have long been one of the most prolific buyers of real estate but one of the largest, the Canada Pension Plan Investment Board, is pulling back their investments here. The Canada Pension Plan Investment Board has now done three deals at steep discounts in order to exit some of their office related holdings. The pension fund has now sold its interests in a pair of Vancouver towers, a business park in Southern California, and a redevelopment project in Manhattan.

Anxiety over office buildings has been plaguing investors for months, as remote work and higher borrowing costs have posed a challenge for real estate investors. In some situations, it’s better to book your losses and reinvest in something that has the potential to perform much better and it t appears that’s exactly what the Canadian pension funds are doing. The recent liquidations could be a sign of more distress to come, but how far can it go before the damage is irreversible?