January 2025

North America

·601W Companies acquire Chicago office tower for $63m, well below Bank of America’s loan on the property for $156m. 601W Cos. and David Werner Real Estate Investments have completed the heavily discounted purchase of the 30-story tower at 303 E. Wacker Drive in Chicago for $62.5 million. This deal, which includes a $32.5 million loan for the purchase and another $30 million allocated for future leasing costs, highlights the ongoing decline in the value of office properties. The new owners took on the property from Boston-based Beacon Capital Partners (previous owner) and Bank of America (previous lender), who had originally paid $182 million for it in 2018 and had a nearly $156 million loan at the time. The sale price reflects the challenges facing the Chicago office market with historically low demand. Despite the tough market conditions, the property is 75% leased with about five years remaining in its average lease terms. Valuation challenges in Chicago has been prevalent shown by Beacon’s acquisition of 333 W. Wacker Drive in 2024 for $125 million, well below the 2015 purchase price of $320.5 million by the previous owner. (Source: 601W Companies, Northwind, CoStar, 2025)

303 E. Wacker Drive in Chicago’s Loop business district

·PGIM and SJP Properties sell historic Manhattan office building at 470 Park Avenue for 40% discount from 2018 purchase price. The historic 470 Park Avenue South, known for its cast-iron clock depicting a wizard, has sold for $147.5 million, marking a 40% discount from its last purchase price of $245 million. The building, spanning 300,000 square feet across two interconnected loft-style office buildings, was previously co-owned by SJP Properties and PGIM, who bought it in 2018. Williams Equities, a firm specializing in historic Manhattan properties, has now acquired the site and plans to continue its renovation efforts. Williams, whose portfolio includes similar properties such as 136 Madison Ave., sees this acquisition as an opportunity to invest in the city's office market ahead of the next cycle. With modernized systems and renovated interiors, the property already boasts significant upgrades, and the firm intends to make additional capital improvements. Williams funded the purchase using proceeds from a prior sale of 655 Madison Ave., capitalizing on the current market valuation of Manhattan office buildings. Global real estate firm Jamestown, which had previously partnered with Williams, remains a limited partner in this latest investment. (Source: Williams, CoStar, 2025)

Williams Equities acquire 470 Park Avenue, Manhattan

·Wells Fargo writes off more office loans; however, there are early signs of office markets stabilizing. Wells Fargo continues to grapple with troubled commercial real estate loans, particularly in its office portfolio, as write-offs increased from 0.24% to 0.3% in Q4 2024. Despite this, the bank saw a 5% decline in nonperforming assets, with $390 million of the reduction tied to office properties. However, CFO Michael Santomassimo cautioned that office market fundamentals remain weak, and losses are expected to be "lumpy" as the bank works through problem loans. According to S&P Global Market Intelligence, losses from distressed office loans will persist for years, but major banks like Wells Fargo, PNC, and Truist have built reserves exceeding 8% of their office portfolios to cushion potential hits. Additionally, banks have been actively modifying loans and reducing commercial real estate exposure, with Wells Fargo’s loan balance dropping to $136.5 billion by year-end, down nearly $35 billion from a year prior. Despite ongoing financial stress, analysts at Morningstar DBRS note early signs of stabilization in the office market, driven by AI firms and a gradual return to in-person work. (Source: Wells Fargo, S&P Global, CoStar, 2025)

·Record long vacancies in US big-box logistics properties, led by Texas, Arizona, and California counties. The U.S. industrial market has reached a milestone with 663 logistics facilities larger than 100,000 square feet sitting vacant for over 18 months as of January 2025, amounting to over 216 million square feet. Their numbers are rising due to an oversupply from a pandemic-driven construction surge. Most of these facilities feature modern standards but have struggled to find tenants in oversaturated markets, creating potential opportunities for investors and tenants. Three counties lead this trend: Dallas County, Texas, tops the list with 24 vacant properties, where development outpaced demand. Maricopa County, Arizona has seen prolonged vacancies due to an ongoing industrial construction boom that extended into late 2024. Harris County, Texas, including Houston, ranks third with a mix of older and newly built facilities competing in a crowded market, with many large vacant properties concentrated near Baytown. Despite robust industrial tenant demand in many regions, the accumulation of vacant, state-of-the-art logistics properties could offer discounted opportunities in the months ahead as developers seek to recover costs amidst a cooling development wave. (Source: CoStar, 2025)

No. of vacant logistics properties at record high

Texas, Arizona, and California counties lead vacancies

·CBRE acquires full stake in Industrious, big bet on future of flexible workspaces. CBRE has completed its purchase of the remaining stake in coworking provider Industrious for roughly $400 million, valuing the company at $800 million. This move solidifies CBRE's endorsement of Industrious' business model, which focuses on profit-sharing leases with landlords, offering greater flexibility compared to traditional office leases. By acquiring Industrious, CBRE further diversifies its offerings, extending its portfolio into flexible office spaces in response to increasing demand driven by hybrid working trends. Industrious operates nearly 200 locations in over 65 cities worldwide, catering to the rising need for adaptable office space. CBRE has been expanding its investment in coworking, with a notable push in 2022 to fund new European and Asian locations. Industry experts predict continued consolidation in the coworking sector, with a growing market for office flexibility as remote work remains common. (Source: CBRE, Industrious, CoStar, Green Street, 2025)

Industrious, Boston

Europe

·Invesco and Simten launch £500m London “brown-to-green” office platform with first acquisition, highlighting increased appetite from US real estate managers. Invesco Real Estate and London-based developer Simten have joined forces to establish a £500 million investment and development platform focused on London offices, with an emphasis on reducing embodied and operational carbon. Their first acquisition is 10 Salisbury Square, a 51,000 sq ft office building purchased from DWS. The platform, named Original Works, will target development opportunities and assist property owners in repositioning assets. Funding comes through Invesco’s Real Estate Europe Fund III, part of its strategy for high-return pan-European investments. Simten’s Mike Rayner highlighted the partnership’s commitment to creating transformative, sustainable spaces. Meanwhile, Richard Chambers of Invesco noted that the "brown-to-green" strategy addresses a generational opportunity in the London market, aligning seasoned expertise with capital to deliver value for investors. Additional acquisitions are planned for 2025, with Ingleby Trice advising on the debut deal. (Source: Invesco, Simten, CoStar, 2025)

10 Salisbury Square

·ICG Real Estate and Garbe JV acquires €222m Italian supermarket portfolio, following a rush of Italian retail investments from international investors. ICG Real Estate, in partnership with Garbe, has purchased a portfolio of 22 grocery stores across Italy for €222m, marking the country’s largest grocery store sale-and-leaseback deal in the last decade. The portfolio, comprising 15 supermarkets and seven hypermarkets totaling 140,000 sq m, has been leased back to Coop Alleanza 3.0 on a 30-year fully CPI-indexed lease. The sale involved properties from BNP Paribas REIM's €400m Retail Partnership fund, with Coop repurchasing 30 supermarkets for €150m and the remaining 22 acquired by ICG and Garbe. The deal underscores the recent surge in Italy's retail real estate market, which saw over €2.2bn in transactions in 2024, its highest since 2014. Other notable deals include Farallon's expected €150m purchase of Centro Sicilia in Sicily and Taconic Capital's €70m acquisition of the Valecenter in Venice. Additionally, Blackstone sold Galleria Subalpina in Turin for €40m, and Milan’s Galleria Borromea shopping center is set for an estimated €50m-€60m sale to Indotek Group. This portfolio acquisition highlights the growing appeal of Italy’s retail market among international investors. (Source: Savills, ICG Real Estate, Green Street, 2025)

Coop Sale & Leaseback

·Starwood and Trustone REIM in talks to acquire Paris office from Amundi for €55m, originally listed at €90m. French asset manager Amundi has re-entered negotiations with Starwood Capital Group and Trustone REIM to sell its Atrium office in Boulogne-Billancourt, Paris, for approximately €55m. Originally listed at €90m, the property faced significant repricing as office prices in Île-de-France have plunged since the ECB began raising interest rates in 2022. The Atrium spans 22,188 sq m and was vacated by tenant TF1 in late 2023, leaving it a value-add opportunity for potential buyers. The deal reflects broader market trends, with office prices in Paris’s suburbs and La Défense falling by nearly 50% since 2022, according to Immostat. Other value-add deals include Principal Real Estate's sale of a Levallois-Perret office to Unibail-Rodamco-Westfield for €33m, down from a €55m asking price, and Johnson & Johnson's €31m sale of its former Issy-les-Moulineaux site, originally listed at €50m. For Amundi, the €55m sale aligns closely with its debt level on the property, showcasing the growing gap between initial valuations and actual sale prices in the challenging office market. (Source: Green Street, Immostat, CoStar, 2025)

Atrium, Boulogne-Billancourt, Paris

·Natixis IM and Generali sign memorandum for asset management merger. Natixis Investment Managers and Generali Investments Holding have signed a memorandum of understanding to merge their asset management activities into a new entity managing €1,900 billion, positioning it as the largest asset manager in Europe by revenue and 9th globally in terms of assets under management. The joint venture, structured as a 50:50 partnership between BPCE (via Natixis IM) and Generali, reflects balanced governance, with BPCE’s Nicolas Namias as Chairman and Generali’s Philippe Donnet as Vice-Chairman. Expected to launch in early 2026, the new entity will oversee a diversified portfolio across Europe (61%), North America (34%), and Asia-Pacific (5%), focusing on bonds (65%), equities (21%), and private assets (14%). This move follows the December 2024 finalisation of the BNP Paribas and Axa IM merger, marking a wave of consolidation in the industry. The Natixis-Generali merger creates a global player poised to rival competitors like Amundi, which currently leads Europe with €2,192 billion in assets. Generali CEO Philippe Donnet highlighted the venture’s potential to build a “leading asset manager in Europe” with strong ties to France, Italy, and the U.S., while BPCE Chairman Nicolas Namias emphasised its alignment with shared values and the strategic opportunity to redefine European asset management. (Source: Business Immo, 2025)

·Blackstone launches largest euro-denominated CMBS since 2021 backed by logistics assets, with Barclays as lead arranger. Blackstone has unveiled Sequoia Logistics 2025-1 DAC, a €525 million commercial mortgage-backed security (CMBS) backed by 53 urban logistics assets, making it the largest euro-denominated issuance since 2021. The assets, 95% of which are located in prime last-mile logistics markets, are geographically distributed across France (44%), Finland (27%), the Netherlands (26%), and Germany. Barclays arranged the transaction, with Deutsche Bank as book runner, and completion is expected in two to three weeks. Blackstone remains the dominant sponsor in the European CMBS market, which saw €2.3 billion of issuance in 2024 as tighter pricing returned with falling interest rates. Earlier in 2025, Finance Ireland launched a €343.6 million CMBS backed by 234 Irish properties, marking an unusually granular deal in terms of loan and borrower count. While still below the €7 billion issued in 2021, these transactions highlight renewed activity in a recovering European CMBS sector. (Source: Fitch Ratings, 2025)