Top 5 California Markets for Office Transactions

Office investment transactions in California amounted to more than $7.5 billion between January and June 2021, according to CommercialEdge data. More than 19.6 million square feet of space changed hands during that time frame.

Total sales volume increased by 15 percent compared to the figure recorded in the first half of 2020, when 17.1 million square feet of space traded for $6.5 billion.

The metros in this ranking account for more than 95 percent of the state’s sales volume for the first half of 2021 and represent the top-performing markets for office transactions, based on CommercialEdge data. Markets such as the Bay Area have nearly doubled their transaction volume year-over-year as of June.

Rank	Market Name	Sales Volume (MM)	Total Sq Ft	Properties Sold
1	Bay Area	$3,389.11	7,617,575	63
2	San Francisco	$1,822.02	2,604,310	15
3	Los Angeles	$1,069.05	2,859,733	38
4	San Diego	$485.21	3,194,074	26
5	Orange County	$373.28	1,466,079	18

5. Orange County

A total of 18 properties changed hands in the market between January and June 2021, for a combined $373.3 million. The deals involved more than 1.4 million square feet.

Transaction volume remained on par with the same period last year, when 1.2 million square feet changed hands for $387.5 million across 15 properties.

In a $41 million 1031 exchange deal, Forward Time Corp. acquired Newport Harbor Medical Plaza in Newport Beach, Calif., from Shaoulian Cardiology. The recently completed, 29,991-square-foot office medical office asset traded at a record-breaking price of $1,367 per square foot.

4.  San Diego

Investment volume in San Diego amounted to more than $485.2 million at the end of June, encompassing close to 3.2 million square feet across 26 properties. The properties traded at an average of $357.63 per square foot.

This represents a 35 percent contraction from the same interval in 2020, when 28 properties totaling 2.1 million square feet changed hands for $755.3 million.

In one of the largest deals in the metro this year through June, Nashville-based Healthcare Realty Trust paid $103 million for Pomerado Outpatient Pavilion, a 160,979-square-foot medical office asset in San Diego’s Poway suburb, sold by Ventas. The facility is situated within the Palomar Medical Center Poway hospital campus.

3. Los Angeles

Transaction volume between January and June 2021 totaled close to $1.1 billion in Los Angeles, encompassing 2.9 million square feet of space across 38 properties.

The amount marks a 28 percent drop over the same period in 2020 when 36 properties totaling 3.8 million square feet changed hands for $1.5 billion.

The metro’s largest office transaction year-to-date through June closed in January. In a $160 million deal, a joint venture between Hackman Capital Partners and Square Mile Capital Management acquired 9050 W. Washington Blvd. in Culver City from H&R REIT. The 172,039-square-foot, three-building office complex was occupied by Sony’s animation department at the time of sale.

2. San Francisco

More than 2.6 million square feet across 15 properties traded in the market between January and June 2021 for $1.8 billion—a 38 percent jump in office investment compared to the same period in 2020, when 10 properties totaling 1 million square feet changed hands for $1.3 billion.

KKR emerged as one of the most-active buyers in the metro. In March, the company acquired The Exchange on 16th, a LEED Platinum-certified office asset in San Francisco’s Mission Bay neighborhood. Sold by Kilroy Realty, the building traded for a record $1.08 billion, or about $1,440 per square foot, commanding the highest price ever paid for a major commercial property in the city.

1. Bay Area

In the Bay Area, investors sold 63 properties totaling more than 7.6 million square feet in the first half of 2021, for a total of $3.4 billion. This accounts for a 79 percent hike over the $1.9 billion recorded between January and June 2020 when 41 properties encompassing 5.3 million square feet changed hands.

The major uptick is due to the pandemic, as activity practically ground to a halt in the spring and summer of 2020.

Following Brookfield Property Partners’ $630 million acquisition of The Village at San Antonio Center I & II in Mountain View, another major office deal closed in the Bay Area a month later.

Singapore-based Mapletree Investments paid $419 million for the iconic Uptown Station in Oakland. Sold by CIM Group, the redevelopment totals 356,000 square feet of creative office space and 35,000 square feet of ground-floor retail.