Single-tenant office properties are serving as a flight-to-safety for institutional office investors. A webinar from Green Street tracked the post-COVID deal flow highlighted the trend. Institutional capital is attracted to the stable income and long-term tenancy of single-tenant properties as a hedge against downside risk, and they are willing to pay big for properties that fit the bill.

Richard Quinn, managing editor of Commercial Mortgage Alert & Real Estate Alert News called the HQ at First transaction in San Jose the “poster child” for the trend. KKR purchased the property from Monterey Trust for $535 million, a record at the time. Interestingly, Monterey Trust purchased the property pre-pandemic in 2019 for $429 million, showing that the asset continued to appreciate through the pandemic, despite the destabilization in the office market.

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Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.

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