Silicon Valley’s office investment sales volume held steady at $5.2 billion for a consecutive year
As leasing fundamentals continue to outpace expectations, investors flush with cash are moderated by speculation as to where the market sits in the cycle.
March 12, 2019
- A strong 4th quarter added close to $1.9 billion in office investment sales to Silicon Valley, pushing total office investment sales volume to approximately $5.2 billion in 2018, on par with the prior year.
- Just over 50% of investment sales in 2018 were concentrated in Mountain View and Palo Alto, a shift from the prior year when roughly half were located in Santa Clara and Sunnyvale.
- The most notable sale of the year was Alphabet Inc.’s purchase of Britannia Shoreline Technology Park from HCP Inc for an estimated $1 billion which included 12 buildings over 51.8 acres that they already currently occupy.
- Most sellers were institutional representing 37.2% of the seller composition, while most buyers were private representing 31.7% of the buyer composition. On net, the total volume of foreign capital acquisitions fell to $186 million from $679 million the prior year.
- As leasing fundamentals continue to outpace expectations, investors flush with cash are moderated by speculation as to where the market sits in the cycle. However, early indications suggest higher sales volumes in 2019 than in 2018 bolstered by the prospects of increased corporate transactions.
Sources: Real Capital Analytics, JLL Research