Silicon Valley Emerges as Significant Secondary Market
Wall Street Journal reports: Defying expectations over the past quarter, the Wall Street Journal recently qualified how activity in the Silicon Valley office market is closing in on its boom-era levels against several different metrics. The Journal stated that rents are rising, leasing activity is up, and vacancy rates have tumbled as technology firms have gobbled up space to expand their operations and accommodate expanding global demand.
All of these improvements have resulted in a material impact on the investment transaction market for offices in the Valley as well. The Journal cited transaction data recorded by Real Capital Analytics in stating that, “A downtown Palo Alto office building, once home to engineers developing the AltaVista search engine and the Java programming language, was sold this month to RREEF, Deutsche Bank's real-estate investment division, for $65 million, or more than $900 a square foot. That deal is in a tie with a sale in downtown Washington as this year's most expensive sale of a U.S. office building over 15,000 square feet.”
As is the case with the technology sector itself, the markets that technology firms occupy en masse can fluctuate drastically over shorter periods than more diversely occupied markets. Google and Facebook’s fortunes are rising among technology firms, and so those two in particular have been eager to expand their payrolls and take more space. However, expansion in both smaller start-ups and industry leading companies has benefited landlords across the Valley over the past quarter, even tempting some to envision development plans getting underway in the near future.
View the full article on Wall Street Journal: Silicon Valley Emerges as Significant Secondary Market
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Posted by: Nina Turner