A Chicago office building that sold for $68 million ten years ago just traded for $4 million. That is a 94% drop, not a typo.
A Denver office complex fetched $176 million in 2013. It just sold for $5.3 million. Same story, different zip code.
The building at 401 S. State St. has been standing in downtown Chicago since 1891. Until late December, it belonged to CWCapital - a loan servicer that takes over commercial real estate loans after borrowers stop paying.
CWCapital took ownership through a 2023 sheriff's sale after the prior owner defaulted on a $42.4 million CMBS loan. It took nearly three more years to find a buyer willing to pay even $4.2 million. The bondholders behind that loan are out tens of millions.
The Denver Energy Center was valued at $176 million back in the 2013 oil boom. It just sold at auction for about $5.3 million.
The new owner plans to convert at least one of the two towers from offices into apartments. That is the only plan that makes the math work at this price.
These are not one-off stumbles. 204 distressed office buildings changed hands in 2025 - up from 133 in 2024. Total distressed office sales cleared $5.2 billion.
The pricing looks like a going-out-of-business sale at a department store. Except the inventory is downtown office towers. Buyers are paying what the buildings are worth as future apartments, not what they cost to build, and definitely not what the lender is still owed.
For investors holding office REITs - real estate investment trusts that own commercial buildings - or CMBS paper (the loans that fund those buildings), these comps matter. They reset the market value of every office tower nearby, whether the owner wants to sell or not.
The bids are coming in. The old price tags are not coming back.