Silicon Valley office transaction activity outperforms previous 3 years
In 2019 office sales volume reached approximately $5.9 billion, surpassing each of the previous 3 years, although fell short of the record year in 2015.
January 22, 2020
- In 2019 office sales volume reached approximately $5.9 billion, surpassing each of the previous 3 years, although fell short of the record year in 2015.
- Sunnyvale led the market in sales transactions for the eighth quarter in a row, representing 53% of total sales in 2019. This can largely be attributed to Google’s purchase of the Yahoo Campus in Q3 2019 as well as the three Cisco buildings they bought in North San Jose during Q4 2019.
- In 2019, the investor composition favored the user/other category representing 38% of all buyers. Private and institutional investors still represent a large share, both over 20%, with international investors representing almost 13% (compared with 6% it represented in 2018). The user/other buyers have a significant impact on the market as their investments will tighten the leasing market and push market rents up while limiting the investment opportunities which will ultimately push up asset valuations.
- After a busy Q3 2019 where $2.1B in transactions closed, Q4 experienced a substantial decrease, but that could potentially result in a more active Q1 2020.
Source: JLL Research, Real Capital Analytics