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California Office Sales Rebound in Q2
It is not surprising to learn 85% of California’s nearly $5 billion in Q2 sales volume was amassed in Los Angeles and the San Francisco Bay Area. Research by Yardi Matrix reveals a 36% increase in the second quarter compared to Q1, however, the sales volume dropped 12% year-over-year in an analysis of transactions closed across seven California office markets.
A total of 56 office deals closed between April and June 2018 in California. Investment activity in the Los Angeles office market consisted of 21 transactions that raked in just under $2 billion, the equivalent of the sales volume recorded in San Francisco and the Bay Area, combined.
Activity in the San Diego market picked up and marked a 71% increase in sales, compared to Q1. In contrast, the Orange County and Sacramento markets hit the brakes, each seeing a year-over-year drop in sales of over 40%.
Key Q2 highlights
– The sharpest increase was in the Bay Area, where average prices rose 41% year-over-year;
– Price per square foot increased 28% year-over-year, resting at $396;
– Los Angeles dominated office investment in California, boasting $1.9 billion traded in Q2, a 53% quarter-over-quarter increase;
– The top deal to close in California in Q2 was Boston Properties’ $616-million buy of Santa Monica Business Park from Equity Office;
– The second-largest sale of the quarter was Northwood Investors’ $300-million acquisition of HNA Group’s 123 Mission Street office tower in San Francisco;
– Blackstone’s Equity Office unloaded $1 billion worth of California assets;
For comments, questions or concerns, please contact Dennis Kaiser
- ◦Sale/Acquisition
