Are you investing in Office Space right now?

[Benjamin Aaker]

I know that Zoom is taking over the office, but I had a 1031 exchange to do and closed on a Class B office building downtown a couple weeks ago. Out of three suites, there are two vacancies, and it's underwater, but will be cash flowing when I get my next tenant in there, even with a reduced rent. It's my first office building. I really think that office will come back as people realize that working from home can't be done 100%. Is this speculating, timing the market, or simply a good investment in a depressed time? I'd love to hear what other people are doing right now in the office sector. 

[Taylor L.]

I can see a case for office investing if you get a deal that's just too good to pass up, but overall I do not see offices as a general necessity. 

Some businesses do need full capacity office space, i.e. doctors, dentists, manufacturing. However, many legacy type businesses simply do not need all of the office space they once had or thought they needed. That could mean a general contraction in the demand for office space, since a substantial percentage of businesses no longer need what they used to need.

All that being said.. I do know folks who are quietly doing some interesting office deals, largely because investors have moved away from office as an asset class. There will always be some need for offices, so there will be money to be made if you can buy the right asset in the right location at the right price.