Top 50 US Office Deals of 2017: Chinese Clampdown Makes Way for South Korean Buyers

One year ago, we did a round-up of the 50 largest office sales to close in the U.S. during 2016. Our analysis showed a slight slowdown in office sales activity compared to the previous year, but buyer interest remained strong. In keeping with tradition, we’re doing the same thing this year, to see if that interest waned during 2017.

Using Yardi Matrix data, we looked at all office buildings of at least 50,000 square feet to sell during the past 12 months in the U.S. In the case of mixed-use properties, we only included buildings featuring more than 50% office space (properties that primarily serve office purposes). The results show a significant drop in the total dollar volume: the top 50 office deals amassed a total of nearly $29 billion in 2017, well below the $37 billion recorded during 2016. Compared to the previous year, when eight cross-market deals landed in our top 50, 2017 did not keep up that trend, with just two major cross-market deals closed. Check out the full top 50 below, and read on to find out more about the state of the U.S. office sales market in 2017.


Duke Realty Hits 2017 Jackpot with $2.3B Portfolio Sale

While 2016 turned out to be the year of large portfolio sales and mergers, in 2017, investors seemed to focus more on single-asset or single-market portfolio buys—with two notable exceptions.

The largest office deal of 2017 was, in fact, a portfolio sale—Duke Realty disposed of a 72-property medical office portfolio known collectively as the “Duke Assets,” which went to Healthcare Trust of America for a whopping $2.3 billion. HTA initially announced plans to invest $2.75 billion in Duke Realty’s medical office business and development platform; however, the deal ultimately excluded 11 properties that were subject to rights of first refusal and/or rights of first offer to third parties. HTA then closed on three additional assets in July 2017, bringing the total tally to $2.3 billion. According to the buyer, 91% of the acquired GLA (gross leasable area) in the Duke portfolio is located within HTA’s 15 to 20 key existing markets.

The only other cross-market deal to land in our top 50 was also a medical office sale. CBRE Global Investment Partners paid $550 million to acquire a 25-building portfolio from a joint venture between Chicago-based MBRE Healthcare and Kayne Anderson Real Estate Advisors (KAREA) in August. The sale was secured on behalf of clients of CBRE, and included medical office buildings across 10 states, with Atlanta and Chicago as key locations. The portfolio included a total of 1.4 million square feet of existing space, as well as a 150,000-square-foot development project. KAREA and MBRE will continue to manage the assets and retain a 5% ownership stake.

HNA Seals Largest Single-Asset Deal of 2017, as the Sole Chinese Buyer on Our List

The 50 priciest office sales of 2016 highlighted the role played by foreign investors in the U.S. real estate market. Asian investment accounted for 15% of the top 50 largest sales of the year, the largest deal being China Life’s $1.6 billion purchase of 1285 Avenue of the Americas in New York, alongside RXR Realty.

245 Park Ave., Manhattan

245 Park Ave., Manhattan

In 2017, these players remained active on the market, as Asian investment accounted for 17% of the top 50 largest sales of the year. The most active player in this category was HNA Group, which closed the largest single-asset of the year with the $2.2 billion acquisition of 245 Park Ave. in Manhattan. The China-based company snagged the 45-story tower in May, from a partnership between Brookfield Properties and the New York State Teachers’ Retirement System. HNA made another notable purchase last year, paying $359 million to acquire the office building at 181 W. Madison in Chicago from CBRE Global Investors. The two sales amounted to a total combined investment of $2.6 billion from HNA, accounting for 9% of the total top 50 sales volume. But what about other Chinese buyers on the list? Spoiler alert—there aren’t any.

Chinese Clampdown Opens Doors for South Korean, Japanese Buyers

HNA Group is the only Chinese buyer on our list of the largest 50 office deals of 2017. Following Beijing’s clampdown on offshore investments, China-based companies have disappeared from the limelight. This in turn has created more investment opportunities for other buyers such as Singapore’s GIC Real Estate, which marks three appearances in our top 50; Japan-based Mori Trust, which closed a $673 million deal in Boston in January; and Unizo Holdings, which managed to snatch the property at 685 Third Ave. in New York City from TIAA.

South Korean investors are also heavily present on our list: an affiliate of Hana Asset Management purchased the NASA Headquarters at Two Independence Square in Washington, D.C., in March, and partnered with Ocean West Capital to buy the Dreamworks Animation Studios in Glendale, Calif., in February; South Korean Investment Group teamed up with CalSTRS to acquire the Campus @ 3333 Portfolio in Santa Clara, Calif.; and the Korean Investment Corp. closed on two Washington, D.C.-area deals alongside GIC Real Estate.

It seems that the increased scrutiny of the Chinese government on outbound real estate investment is already having a strong impact on the U.S. office sales market, as in the last few years, China-based companies invested billions of dollars in this sector, either on their own or through joint ventures with U.S. entities. Yet that doesn’t mean that the market is necessarily going to slow down—the retreat of Chinese investors might just open the door for other U.S.-based or foreign buyers to get their hands on high-quality assets in desirable markets that might have been inaccessible to them pre-clampdown.


We used Yardi Matrix data to analyze all transactions recorded up until December 5, 2017, of office buildings equal to or in excess of 50,000 square feet. In the case of mixed-use assets, only properties featuring more than 50% office space were included in the analysis.