Office buildings across the country are starting to trade at significant markdowns, in many cases selling for less than the value of their loan. Those types of transactions, executed in concert with the buildings’ lenders, are known as short sales.

Lenders have lost patience waiting for an office sector recovery that has failed to materialize and owners of struggling assets are finding it difficult to refinance debt at terms they can actually pay, market insiders say, kicking off a wave of forced sales that are expected to dominate capital markets throughout the year.

“We’re definitely seeing owners want to give up the properties, especially ones that were recently purchased, where their equity has likely been wiped out,” said Holly MacDonald-Korth, CEO of Miami-based investment firm KDM Financial.

“If they had 10% or 15% equity in a building and the building is marked down 25% or 30%, they feel like they’re wiped out,” she said. “They would probably be made full if they were a long-term owner, but a lot of them are looking to give back the keys.”

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