In the auction arena, most commercial real estate observers might think of multifamily and retail assets getting the most play. But office buildings are changing hands through this process as well. The second-largest office transaction in Orlando last year was done through Auction.com's platform, according to the Irvine, CA-based firm, which is a GlobeSt.com Thought Leader. Eric Paulsen, Auction.com's co-chief executive officer, spoke to us recently about his thoughts on the office assets being auctioned and the direction in which the overall sector is headed.

GlobeSt.com: Office isn't the hottest sector right now, but do you see any growth in transaction volume in the near future?

Eric Paulsen: I do think you are going to see more office transactions taking place. Whether a particular market recovers, or continues to remain stagnant, there is still pent up demand and office is still a desirable asset class for sophisticated investors. The key with distressed office is: 1) An office owner is usually more institutional in nature, whereas in the apartment sector or even in single tenants, you may have more of an individual, or one-off owner. Office owners usually underwrite more conservatively to allow for the potential for downside risk. They're the ones who should be better prepared for downturns, especially given the risk and cost of tenant turnovers. That's one of the reasons why I think there has not been as much office product, compared to other asset classes, available in today's distressed market. However, we're in an overall distressed market, so if you do see office today, it is either a solid investment opportunity, or there is a “story” behind it, tied to the fact that we are still in the 4^th or 5^th year of economic troubles and lack of job growth.