State Commercial Properties for Sale to Highest Bidders

February 26, 2010

State and local governments in Arizona, Connecticut, and California are compensating for budget shortfalls by selling their office high-rises, prisons, and even capitol buildings. Arizona recently invited investors to buy bonds secured by several landmark state government buildings, while Connecticut, also facing budget problems, has made plans to bring in $60 million over the next two years from real estate sales.

State and local governments in Arizona, Connecticut, and California are compensating for budget shortfalls by selling their office high-rises, prisons, and even capitol buildings. Arizona recently invited investors to buy bonds secured by several landmark state government buildings, while Connecticut, also facing budget problems, has made plans to bring in $60 million over the next two years from real estate sales.

California, with a $20 billion budget gap projected through June 2011, has the most ambitious sell-off plan: In March, the state will begin marketing nearly 9 million square feet of office space valued at around $2 billion.

Among the 17 buildings California is selling are two in San Francisco that house the state supreme court and a federal appeals court, among other tenants. Arizona, meanwhile, put up both chambers of its state legislature as collateral.

Federal, state, and local governments sold 24 commercial buildings worth $4.2 million last year, not including government auctions of seized properties.

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