News June 30, 2020
Private Real Estate's Great Office Headache
When asked by PERE about the future of investing in office real estate, Madison Realty Capital Managing Principal and Co-Founder Josh Zegen was straightforward. “In order of magnitude, retail, hotel, and office sectors have the most uncertainty,” Zegen told the financial publication. “Office is one sector most subject to a reset in pricing.” Zegen noted that tenants whose normal operations were affected by COVID-19 shutdowns actually have some leverage when it comes to negotiating rent resets with landlords, who otherwise would have to absorb costs related to new tenant turnover. After more than a decade in the private debt funds and property management sectors, Zegen and the rest of the Madison Realty Capital team have seen their fair share of boom and bust cycles, and Zegen’s cautious attitude speaks more to the current moment’s uncertainty than a long-term negative outlook.