Los Angeles has boosted California onto Commercial Café's Nation's Top 20 Office Deals list for the second year in a row. California has four deals on the top 20 list, with three in Los Angeles. The largest, ranking number 8, is the 67% stake acquisition of 1999 Avenue of the Stars for $573 million and the sales of 1299 Ocean and 429 Santa Monica in Santa Monica, which total $362 million. The fourth office sale is JMB Financial Advisors' purchase of 44 Montgomery Street for $475 million.
“In 2016, California had just one deal make it into the nation's top 20 deals in H1, 10880, 10940, 10960 Wilshire and 1100 Glendon Ave in Los Angeles, for $1.3 billion,” Carina Bukos, a research analyst at Commercial Café, tells GlobeSt.com. “This year, the four transactions brought California's sales volume up to $1.8 billion in H1. It has been the second best H1 since 2013. Some of this activity is a result of sustained development. California added 3.2 million square feet in Q2 alone, and is expected to deliver another 11 million square feet by the third quarter. Office transactions on this market so far this year may have been less impressive than their East Coast counterparts, but they provide more flexibility in a valuable market.”
In addition to claiming three spots in the top 20 list, Los Angeles has been one of the most active markets in the first half of the year. “L.A. and Santa Monica have been closing the most deals in these first six months, and at least part of that is due to the more modest average price per square foot commanded by this market, ranking third in Q2, behind both San Francisco and the Bay Area,” adds Bukos.
Some may be surprised that San Francisco doesn't have more deals on this list; however, the market falls behind Los Angeles in terms of deal volume. “San Francisco has been the leading Californian market when it comes to average price per square foot, but in terms of sales volume and number of deals, L.A. rests securely in the first position,” says Bukos.
Investment activity typically picks up in the second half of the year, and Bukos expects the second half of 2017 to be no different. “Considering market trends since 2013, the second half of the year usually brings about a surge in investment activity,” she adds. “It would be safe to assume that it will probably be the case of H2 2017 too.”
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.