Investors of All Stripes Are Still Interested in Silicon Valley Office Buildings
The impediment to more office transactions in the market has been a dearth of core-plus properties for sale.
January 25, 2021 | Patricia Kirk | Wealth Management Real Estate
Unlike neighboring San Francisco and many large office markets nationally, the Silicon Valley office market has continued to shine throughout the current recession, with positive net absorption, stable rents and ongoing investor activity.
The strength of the Valley’s office market is a reflection of its tenants, which have continued to grow and expand during the COVID-19 pandemic as other industries have contracted. “NVIDIA, Paypal, Crowdstrike, and AMD are just some of the companies that have more than doubled their value during this period,” says Alexander Quinn, director of research for Northern California with real estate services firm JLL. Eleven Silicon Valley-based companies also went public in 2020, with an estimated market cap of $41 billion, Quinn adds. That, in turn, has fueled more venture funding in local technology start-ups, including those specializing in fintech, AI and autonomous vehicles.
In fact, Oxford Economics forecasts that the San Jose Metropolitan Statistical Areas will realize the highest GDP growth among major U.S. metros in 2021, ahead of Austin and Seattle.
