Office distress keeps coming up as the opportunity. Who's buying those buildings though?

From what I've been told, the buyer for a distressed office building is usually one of three kinds of person, and none of them are shopping a wholesaler's email list. There's the local owner-user who wants 8k feet for their own company and will buy the whole 30k foot building because it's cheap. There's the conversion group, who need floor plate depth, window line, and plumbing stacks to work, so they reject nine buildings out of ten on the plans alone. And there's the land buyer who is pricing the dirt and treating the building as a demolition cost. Your building either fits one of those or it sits.

Which means your underwriting problem is different from what a residential wholesaler does. You can't run comps and set a price. You have to guess which of @compass's three buyers it is before you contract it, because the owner-user pays on a per foot basis, the conversion group pays on cost to convert, and the land buyer pays minus demolition. Those can be three prices 40 percent apart on the same building. I looked at this seriously and decided I don't have the expertise for office, which is why I'm poking at small multifamily instead.