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Top 20 Office Deals of H1 2017

| Commercial Real Estate News, Deals, Office| Views: 1054

 

After a cautious, yet fruitful year in 2016, investors continue to bet on the bustling U.S. office sector. We used in-depth Yardi Matrix data to compile a list of the 20 largest office transactions to close during the first six months of the current year, and the results paint a promising picture of the market in 2017.

The U.S. office sales market fired on all cylinders during the first half of the year, and the two largest deals each topped the $2 billion mark. By comparison, the largest office sale of 2016 fetched $1.95 billion–and that was a 19-piece portfolio deal.

Another thing that stands out is the fact that investors are shifting their focus outside New York City this year. Compared to 2016, when most office deals closed in Manhattan, the first half of 2017 showed more diversity. Bustling markets such as Washington, D.C., Los Angeles, San Francisco and Boston all made the top 20, while the third-largest office transaction so far this year closed in Charlotte.

Various portfolio and partial stake deals made the list, which is in line with the trend we witnessed in 2016. The largest portfolio deal so far in 2017 was the $2.2 billion sale of Duke Realty’s medical office portfolio to Healthcare Trust of America.

Once again, Asian investors landed in the limelight, and HNA Group led the pack with its $2.21 billion purchase of 245 Park Ave. in Manhattan. Singapore-based GIC Real Estate made the list thrice, shelling out close to $2 billion on U.S. office assets together with its joint venture partners. Other high-profile foreign buyers include Ivanhoe Cambridge, the Qatar Investment Authority, Deutsche Bank, Mori Trust and the Korea Investment Corp.

Check out the top 20 office sales of H1 2017 below, and scroll down for more details on each contender:

1245 Park AvenueNew York City

Sale Price: $2,210,000,000
245 Park Ave., Manhattan (via Yardi Matrix)

245 Park Ave., Manhattan (via Yardi Matrix)

  • Buyer: HNA Group
  • Seller: Brookfield Properties and the New York State Teachers Retirement System
  • Highlights: The sale of 245 Park Ave. to China-based HNA Group was the largest office transaction of Q2 2017, and one of the priciest deals to ever close on the Manhattan market.

2Duke Realty Medical Office Portfolio – National

Sale price: $2,200,000,000
  • Buyer: Healthcare Trust of America
  • Seller: Duke Realty
  • Highlights: HTA is purchasing Duke Realty’s entire 78-building, 6.1 million-square-foot medical office portfolio, in several tranches. At the end of the second quarter, HTA had closed on the majority of the $2.75 billion portfolio, with the final closing date scheduled for Q3 2017.

3Ballantyne Corporate ParkCharlotte

Sale price: $1,174,350,000
Ballantyne Corporate Park - SPX Building (via Yardi Matrix)

Ballantyne Corporate Park – SPX Building (via Yardi Matrix)

  • Buyer: Northwood
  • Seller: The Bissell Companies
  • Highlights: The sale of the 535-acre, master-planned campus closed in more than 40 separate transactions, according to the Charlotte Business Journal. The complex incorporates over 4 million square feet of Class A office space and a total of 600 hotel rooms. Its tenant roster includes MetLife, Wells Fargo, TIAA, Liberty Mutual and Siemens, among others.

460 Wall StreetNew York City

Sale price: $1,040,000,000
60 Wall St., NYC (by Matthew Bisanz via Wikimedia Commons)

60 Wall St., NYC (by Matthew Bisanz via Wikimedia Commons)

  • Buyer: GIC Real Estate (95% stake)
  • Seller: Paramount Group
  • Highlights: Singaporean sovereign wealth fund GIC formed a 95%/5% joint venture with Paramount Group to acquire the 47-story, 1.6 million-square-foot office tower. Paramount has retained a 5% stake in the Downtown Manhattan property, which houses Deutsche Bank’s U.S. headquarters. The sale of 60 Wall St. was the largest office transaction to close in New York City in Q1 2017.

5The Landmark at EastviewTarrytown, N.Y.

Sale price: $720,000,000
The Landmark at Eastview, Tarrytown, N.Y. (via BioMed Realty)

The Landmark at Eastview, Tarrytown, N.Y. (via BioMed Realty)

  • Buyer: Regeneron Pharmaceuticals Inc.
  • Seller: BioMed Realty
  • Highlights: Regeneron closed on the acquisition of its 150-acre corporate headquarters campus at 735-777 Old Saw Mill River Road in late March. Located just 30 minutes from Manhattan, The Landmark at Eastview is one of the largest privately owned, multi-tenant science parks in New York State. The campus includes eight buildings and 1.1 million square feet of rentable office space, according to BioMed Realty.

610 St. James Avenue & 75 Arlington StreetBoston

Sale price: $673,000,000
10 St. James Ave. & 75 Arlington St., Boston (via Yardi Matrix)

10 St. James Ave. & 75 Arlington St., Boston (via Yardi Matrix)

  • Buyer: Mori Trust
  • Seller: Liberty Mutual Insurance
  • Highlights: Japan-based Mori Trust Group entered the U.S. real estate market with the acquisition of two office assets in Boston’s Back Bay in January. According to Bisnow, the purchase of 10 St. James Ave. and 75 Arlington St. is part of the company’s “Advance 2027” investment plan. Mori Trust is expected to invest between $865 million and $1.7 billion in overseas real estate assets.

785 Broad StreetNew York City

Sale price: $652,000,000
85 broad St, Manhattan (via Yardi Matrix)

85 broad St, Manhattan (via Yardi Matrix)

  • Buyer: Ivanhoé Cambridge and Callahan Capital Properties
  • Seller: MetLife Real Estate and Beacon Capital Partners
  • Highlights: The joint venture between Canada-based Ivanhoe Cambridge and Chicago-based Callahan Capital closed on the purchase of 85 Broad St. in early June. The 30-story office building was built in 1983 as the headquarters for Goldman Sachs, which operated at the site until 2010, when it moved to a new location on West Street. The acquisition represented Callahan Capital’s first Downtown Manhattan purchase.

8SunAmerica CenterLos Angeles

Sale price: $572,850,000 (67% stake)
1999 Avenue of the Stars, Los Angeles (Yardi Matrix)

1999 Avenue of the Stars, Los Angeles (Yardi Matrix)

  • Buyer: JMB Financial Advisors
  • Seller: The Blackstone Group
  • Highlights: JMB’s purchase of a 66.6% stake in the SunAmerica Center was the largest sale to close on the California market in Q2 2017. The $573 million price tag was nearly eight times higher than when Equity Office bought the partial stake from JMB in 1999.

9Greenway Portfolio – Houston

Sale price: $512,100,000
3 Greenway Plaza, Houston (via Yardi Matrix)

3 Greenway Plaza, Houston (via Yardi Matrix)

  • Buyer: CPPIB, TH Real Estate and Silverpeak Real Estate Partners
  • Seller: Parkway Properties
  • Highlights: A partnership between the Canada Pension Plan Investment Board (CPPIB), Silverpeak Real Estate Partners and affiliates of TH Real Estate acquired a 49% stake in the 11-building, roughly 5 million-square-foot Greenway office portfolio, in Q1 2017. The portfolio included the Phoenix Tower at 3200 Southwest Fwy, 3800 Buffalo Speedway, and nine buildings that are part of the Greenway Plaza office campus.

1044 Montgomery StreetSan Francisco

Sale price: $475,400,000
44 Montgomery St., San Francisco (via Yardi Matrix)

44 Montgomery St., San Francisco (via Yardi Matrix)

  • Buyer: Beacon Capital Partners
  • Seller: Seagate Properties
  • Highlights: The priciest transaction to close in San Francisco in the year’s second quarter, the $475 million sale of 44 Montgomery St. was finalized in April. Located in the city’s Financial District, the 43-story, 746,384-square-foot tower is home to Monsanto and Related Cos., among others.

11WaterviewArlington, Va.

Sale price: $460,000,000
Waterview - 1919 North Lynn St., Arlington, Va. (via Yardi Matrix)

Waterview – 1919 North Lynn St., Arlington, Va. (via Yardi Matrix)

  • Buyer: Morgan Stanley
  • Seller: Paramount Group
  • Highlights: The building located at 1919 North Lynn Street in Arlington’s Rosslyn submarket changed hands in May, for $711 per square foot. The 24-story, 647,243-square-foot office high-rise is LEED Gold-certified and includes 901 parking spaces and 5,535 square feet of retail space.

12One California PlazaLos Angeles

Sale price: $459,000,000
One California Plaza, Los Angeles (via Yardi Matrix)

One California Plaza, Los Angeles (via Yardi Matrix)

  • Buyer: Rising Realty Partners and Colony NorthStar
  • Seller: Beacon Capital Partners
  • Highlights: The 42-story Bunker Hill property changed ownership in June, with the aid of a $285 million loan funded by Bank of America and Wells Fargo Bank. The move is just the latest in a series of investments made by Rising Realty Partners on the Los Angeles market. According to Los Angeles Downtown News, the company has also bought and renovated the PacMutual Building, Figueroa Plaza and One Bunker Hill.

13100 Northern AvenueBoston

Sale price: $447,000,000
  • Buyer: Deutsche Bank
  • Seller: The Fallon Company
  • Highlights: The 17-story office tower in Boston’s Seaport District was acquired by an investment arm of Deutsche Bank in March, in one of the city’s priciest transactions, according to The Boston Globe. Completed in 2016, the building is home to prominent law firm Goodwin, and is managed by CBRE.

14Lafayette CentreWashington, D.C.

Sale price: $404,000,000
One Lafayette Centre - 1120 20th St. NW., Washington, D.C. (via Yardi Matrix)

One Lafayette Centre – 1120 20th St. NW., Washington, D.C. (via Yardi Matrix)

  • Buyer: GIC Real Estate and Korea Investment Corp.
  • Seller: Beacon Capital Partners
  • Highlights: Singaporean sovereign wealth fund GIC has teamed up with a group of investors, including affiliates of Beacon Capital Partners, to acquire more than 2.1 million square feet of office assets in the Washington, D.C., metro totaling over $1.05 billion in asset value. One of these joint ventures included the March purchase of the three-building, 789,000-square-foot Lafayette Centre in Washington’s central business district.

15Pentagon Center Complex – Arlington, Va.

Sale price: $379,500,000
The Zachary Taylor Building, 2530 Crystal Drive, Arlington, Va. (via Yardi Matrix)

The Zachary Taylor Building, 2530 Crystal Drive, Arlington, Va. (via Yardi Matrix)

  • Buyer: GIC Real Estate and Korea Investment Corp.
  • Seller: Beacon Capital Partners
  • Highlights: Just one in a series of joint ventures led by Singapore-based GIC Real Estate, the purchase of the 912,000-square-foot, two-building Pentagon Center complex closed in late February. The James K. Polk and Zachary Taylor buildings, located in the Crystal City submarket of Arlington, are home to the U.S. General Services Administration.

16HBO BuildingNew York City

Sale price: $370,000,000
  • Buyer: Brookfield Properties and The Swig Co.
  • Seller: Eugene A. Hoffman Management
  • Highlights: As long-time tenant HBO prepares to vacate its home at 1100 Avenue of the Americas and move to Hudson Yards in 2018, property owner Eugene A. Hoffman Management, operated by the Nickerson family, is betting on Brookfield Properties and The Swig Co. to find suitable new tenants for the building. Brookfield acquired a long-term ground lease of the building in March, a move that will allow it to operate the property while paying rent to the Nickersons, according to Crain’s.

17100 High StreetBoston

Sale price: $370,000,000
100 High St., Boston (via Yardi Matrix)

100 High St., Boston (via Yardi Matrix)

  • Buyer: Rockpoint Group
  • Seller: CBRE Global Investors
  • Highlights: In late January, Rockpoint Group shelled out $370 million on the 28-story office building in the Boston CBD–31% more than when CBRE purchased the asset in 2014. The 546,336-square-foot Class A+ property is LEED Silver-certified and houses tenants such as Marcus & Millichap, Zurich, Duane Morris and BMO Capital Markets, per Yardi Matrix data.

18NJ Office Portfolio – Short Hills, N.J., and Madison, N.J.

Sale price: $367,800,000
  • Buyer: Mack-Cali Realty Corporation
  • Seller: RXR Realty
  • Highlights: Mack-Cali made the news in March by spearheading one of the largest office portfolio deals to ever close in the state of New Jersey. The Jersey City-based REIT paid $368 million for the properties located at 51, 101 and 103 JFK Parkway in Short Hills and 1, 3 and 7 Giralda Farms in Madison. Notable tenants include KPMG, Wells Fargo, Merrill Lynch, Citibank, Franklin Mutual Advisors, Pfizer and Prudential.

191, 2, 3 Center PlazaBoston

Sale price: $365,000,000
1 Center Plaza, Boston (via Yardi Matrix)

1 Center Plaza, Boston (via Yardi Matrix)

  • Buyer: Synergy Investments and GreenOak Real Estate
  • Seller: Shorenstein Properties
  • Highlights: The 741,200-square-foot Center Plaza mixed-use complex lies adjacent to Boston’s Government Center, and incorporates three interconnected buildings and a 575-space, below-grade parking garage. According to the Boston Business Journal, the property is conveniently situated near prominent local institutions including Boston City Hall, the John F. Kennedy Federal Building and Suffolk University. One Center Plaza used to house FBI’s Boston Division, until late 2016, when the division moved to Chelsea, Mass.

201299 Ocean Ave. & 429 Santa MonicaSanta Monica

Sale price: $362,000,000
1299 Ocean Ave., Santa Monica (via Yardi Matrix)

1299 Ocean Ave., Santa Monica (via Yardi Matrix)

  • Buyer: Douglas Emmett and the Qatar Investment Authority
  • Seller: The Blackstone Group
  • Highlights: The same joint venture between Douglas Emmett and the QIA purchased 12100 and 233 Wilshire Boulevard in Los Angeles in 2016, and was one of the most active buyers on the market last year. This latest Santa Monica deal pushed Douglas Emmett’s ownership share of the downtown Santa Monica Class A office market from 55% to 71%.

Methodology

  • Data source: Yardi Matrix, proprietary research;
  • Transactions recorded until June 30, 2017;
  • In the case of mixed-use assets, only properties featuring more than 50% office space were taken into account.

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