{"id":17631,"date":"2017-03-25T05:00:20","date_gmt":"2017-03-25T12:00:20","guid":{"rendered":"http:\/\/www.yardi.com\/blog\/?p=17631"},"modified":"2026-02-22T15:28:58","modified_gmt":"2026-02-22T23:28:58","slug":"top-office-deals-2","status":"publish","type":"post","link":"https:\/\/www.yardi.com\/blog\/top-office-deals-2\/","title":{"rendered":"Top Office Deals"},"content":{"rendered":"

The U.S. commercial real estate market took something of a respite in 2016, during a year characterized by political volatility. Compared to the previous year, when the market fired on all cylinders, office players were more cautious in 2016, with leasing and sales activity cooling down to more sustainable levels, per most industry reports.<\/p>\n

Office tenants were reluctant to make any major moves pending the conclusion of the presidential election, thus lease renewals and consolidations took the stage in the past year. Though office sales activity also decreased 7% year-over-year, according to\u00a0Colliers<\/a>, the national transaction volume was still the fourth-highest yearly total in the past 15 years, reaching $140.5 billion.<\/p>\n

We enlisted the help of\u00a0Yardi Matrix<\/a>\u00a0sales data to round up a list of the 50 largest office deals of 2016. The results of our analysis aren\u2019t all that surprising:\u00a0the New York City\u00a0office investment<\/a> market remains the most attractive destination for both local and offshore buyers, though other markets also landed a good deal of capital in the past year. The U.S. office market is poised to become even more attractive in the future, especially to foreign investors, if Brexit goes through.<\/p>\n

Check out the list of the\u00a0top 50 largest office deals of 2016<\/a> on the CommercialCafe blog.<\/p>\n

NYC Home to\u00a0Largest Single-Asset Sale of the Year<\/strong><\/p>\n

\"787
787 7th Ave., New York City (via 787nyc.com)<\/figcaption><\/figure>\n

The priciest office transaction\u00a0in\u00a0New York City<\/a>\u00a0and the second-largest overall office deal of the year was the $1.93 billion sale of the AXA Equitable Center at\u00a0787 Seventh\u00a0Avenue<\/a>\u00a0in Manhattan. One of the biggest investments in pension fund CalPERS\u2019 history, the sale closed Jan. 27, 2016, at $1,179 per square foot. The 51-story, 1.6 million-square-foot tower is LEED certified and includes 49,000 square feet of retail space, a parking garage and access to the underground concourse of Rockefeller Center. CalPERS bought the property from AXA Financial.<\/p>\n

Asian Investment Accounts for 15% of the Top 50 Sales of 2016<\/strong><\/p>\n

Drawn by the array of investment opportunities, the promise of long-term, stable returns and property market stability, foreign investors are now pumping more and more money into U.S. commercial real estate, with a clear focus on office assets.\u00a0Seven\u00a0out of the top 50 office deals of the year were closed by Asian buyers, accounting for 15% of the\u00a0total sales volume.<\/p>\n

Notable transactions included China Life\u2019s $1.64 billion purchase of\u00a01285 Avenue of the Americas\u00a0in New York, in a joint venture with RXR Realty; the Hong Kong Monetary Authority\u2019s $1.15 billion acquisition of\u00a01095 Avenue of the Americas; Mirae Asset Global Investments\u2019 $825 million partnership with Transwestern, with the firm landing 2.2 million square feet of Dallas office space for rent<\/a>; and Korea Investment Management Co.\u2019s $354 million buy of\u00a02970 Market St.\u00a0in Philadelphia.<\/p>\n

It comes as no surprise then that the market has become a haven for offshore investors, who are pumping record amounts of capital into U.S. office assets, especially in primary urban cores. According to\u00a0JLL research<\/a>, foreign office investment surpassed $20 billion in 2016, accounting for 16% of the overall acquisition volume. And while, historically, Canadians have been the most active foreign players on the market, Asian and German investors are now stealing the spotlight.<\/p>\n

According to an\u00a0<\/strong>Asia Society special report<\/a>, China overtook Canada as the biggest foreign buyer of U.S. homes in 2015 and is already the largest holder of residential mortgage-backed securities issued by U.S. government-sponsored enterprises. A recent\u00a0Rhodium Group study<\/a>\u00a0further shows that Chinese companies invested a record $45.6 billion in the U.S. economy in 2016, triple the amount recorded in 2015. Most investments came in the form of acquisitions, which accounted for $44 billion, per the study, primarily focused on real estate and hospitality.<\/p>\n

Portfolio Deals Making a Comeback<\/strong><\/p>\n

\"Greenway
Greenway Plaza in Houston, part of Cousins Properties\u2019 merger with Parkway Properties (via Yardi Matrix)<\/figcaption><\/figure>\n

Though investment was mainly focused on single-asset transactions, there were a few major portfolio deals that made the news in 2016. However, portfolio volumes are lagging behind prior cycle levels, per\u00a0JLL<\/em>\u2014in 2006-2007, large portfolio deals drove activity in the office sector, without even taking the\u00a0Blackstone-Equity Office merger<\/a>\u00a0into account. Even so, the largest office sale of 2016 was a portfolio deal, with entity-level transactions expected to multiply\u00a0in the following years. We thought we\u2019d take a look at the most notable portfolio deals of the past year:<\/p>\n