When No One Shows Up, Opportunity Does: The Office REIT Reset

2026-04-12 10:20:07 ET

More than 20 years ago, I stumbled into one of the most important lessons of my career - and it didn’t come from Wall Street.

It came from a foreclosure auction.

I had heard that a local shopping center in South Carolina was headed to foreclosure, so I decided to attend out of curiosity. When I arrived, I expected a crowd.

Instead, it was just me… and the judge.

The opening bid was $600,000.

Silence.

So I raised my hand - and just like that, I became the owner of a 100,000-square-foot, formerly Walmart-anchored shopping center for roughly $6.00 per square foot.

On paper, it looked like a disaster. The property was only about 20% occupied.

Over the next year, I went to work - leasing aggressively, repositioning the asset, and unlocking value. I sold an outparcel and stabilized the center (and reduced the basis down to $3.00 per square foot).

Within 12 months, net operating income approached $300,000, and after investing over $700,000 in renovations, my return on cost was about 30%.

That experience taught me: distress doesn’t eliminate value - it transfers it.

Today, we’re seeing a similar dynamic in the office sector.

Office REIT Landscape: Who’s Who in the Reset

According to the Wall Street Journal, some office buildings are trading at discounts of more than 90%. Owners and lenders are capitulating after years of hoping for a recovery....

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