Silicon Valley commercial had its busiest year in 2021 as spending on office buildings and research and development properties surged 80 percent to a record $8.7 billion.
Spending on office buildings jumped 63 percent to $4.83 billion and more than doubled to $3.9 billion for research and development buildings, the Mercury News reported, citing commercial real estate services firm CBRE. Total sales were well above the latest five-year average of $6.39 billion as 132 properties making up 15 million square feet changed hands.
The reason was simple, according to CBRE: “Pent-up demand amid a recovering market
The most expensive commercial property deal last year was AGC Equity Partners’ $780 million purchase of three office buildings in a north San Coleman Highline tech campus complex that’s leased to Yahoo. The No. 2 purchase was Brookfield Properties’ $630 million deal for two office buildings leased by Facebook, a movie theater, and a parking garage in Mountain View.
During the height of the pandemic, several tech firms sought to shrink their Bay Area footprints, including Twitter and Dropbox. CBRE said 2022 is shaping up to be another active year, noting that seven significant office and research and development property sales have already been completed.
“The inflow of capital to Silicon Valley’s office and R&D investment market should continue to grow as tech and life sciences companies ramp up their hiring, require more space and welcome back their workforces to their offices,” CBRE said.
A recent report by CommercialSearch found that four of the five most expensive office submarkets were in San Francisco and the Bay area. Menlo Park had the most expensive submarket with an average of $118.73 per square foot. Mountain View West was third at $95.64, Palo Alto ranked fourth at $93.49 and Redwood City rounded up the top five at $92.50.
[The Mercury News] — Gabriel Poblete
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