I kinda like the NEMA building itself, but the location near Civic Center is right in the middle of the fentanylpocalypse. Of all the places to lose value, this one doesn't surprise me much.
The problem is that there are large numbers of dwellings that are empty, but the property owners don't want to rent them out in the vague hope that in the future they'll be able to charge much more.
So you get high rents and homelessness (that's your fentanylpocalypse that you've decided is the city's fault and not the predictable consequence of cost driven homelessness) while also having large numbers of unoccupied apartments. All because a bunch of investors are hoping that by restricting the supply they can push rent prices up.
There isn’t a perfect relationship between cap rates and interest rates, especially during this cycle cap rates haven’t fallen as quickly as expected.
The cap calculation on the property has also been fixed by cutting the price in half, but more importantly a new commercial owner would at least be able to service a loan based on the new value.. While the cap rate could be such that expectations are insufficient for debt service, I think that means there are no realistic buyers.