SETT Snapshot
May 2025
Welcome to the May edition of the SETT Snapshot!
This month, we explore the growing divergence in commercial real estate: distress at the surface, but resilience building underneath.
IN THE MARKET
Bouncing along the Bottom.
The office market headlines are alarming - both nationally and in our own backyards. In Denver, a nearly 1 million-square-foot office property sold for a staggering 98% less than its 2019 sale price. In Minneapolis, a comparable asset sold at a 97% discount to its 2016 sale price. On the surface, these transactions suggest a market in freefall. Are we witnessing a self-reinforcing doom loop of distress? Or are these sales isolated events - symptoms of outdated assets rather than systemic dysfunction?
We believe it’s the latter and that these transactions aren’t bellwethers of broad-based decline, but signs of an evolving market shedding outdated inventory. Many of today’s distressed assets are prime candidates for adaptive reuse, which should help tighten the overall supply picture in oversaturated urban cores.
While the headline numbers remain sobering, a closer look reveals signs of recovery. Return-to-office mandates are gaining momentum, leasing activity is rebounding, and employee foot traffic is on the rise. These incremental demand-side improvements are slowly but steadily bolstering market fundamentals. For opportunistic investors, this moment presents a rare window: the chance to acquire well-located assets at deeply distressed pricing, just as the demand outlook turns.
ON OUR MINDS
Dry Powder. Major players are ready to pounce. Among others, Brookfield raised a $16 billion fund and Blackstone sits on a staggering $47 billion of available capital.
Energy. As discussed last month, nuclear power is re-entering the conversation - a potential game changer for powering the data and AI infrastructure of the future. Germany reversed course and will treat nuclear energy as a green energy source. And in the United States, nuclear energy is gaining traction on the national and local levels.
Social Media to IRL. Bob Knakal and Strip Mall Guy are proving that digital credibility can drive real-world deal flow (and while we’re here, a shameless plug to follow SETT on LinkedIn!).
IN THE SETT
PropTech Elevated. We are excited to expand our strategic partnership with Aviometry, bringing cutting-edge drone technology into the heart of our asset management and advisory services. By leveraging high-resolution 3D models and 2D aerial maps, we empower property owners and managers to digitally view, analyze and engage with their physical assets - anytime, from anywhere.
Comprehensive Property Insights: High-resolution aerial models provide detailed assessments of roofs, landscaping and hardscape conditions - enhancing due diligence, maintenance planning and insurance documentation.
Remote Measurement & Monitoring: Precise measurements capture and track site changes over time, enabling accurate job scoping, vendor comparisons and proactive asset performance management.
Collaborative Digital Access: Interactive, cloud-based models allow teams to collaborate remotely, improving transparency, coordination and decision-making across all phases of asset management.
Contact us to learn more or schedule a demonstration of how this transformative technology can optimize your asset and portfolio management.
As the market continues to evolve, we remain grateful for your partnership and trust. Whether searching for new opportunities or navigating asset-level strategies and decisions, we are here to help. Don’t hesitate to reach out for a deeper dive into any of the topics covered this month.