When it comes to the office industry, 2022 was another entry in a series of transformative years. With work time still shared between home and the office (for most companies), the office building continued to take on the role of an amenity-rich, collaboration-enhancing hub. Despite the change in works habits, Phoenix claimed the eighth largest office deal in the U.S. for 2022.

In this context, we wanted to find the largest transactions of office properties last year, as well as the markets that the respective properties hailed from. To that end, to find the largest office deal in the U.S., we ranked the most expensive transactions of office buildings larger than 25,000 square feet based on data compiled by CommercialEdge.

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Key Takeaways for Metro Phoenix:

  • The $504 million sale of the Esplanade (Portfolio) properties from Phoenix ranked 8th among the nation’s top 50 office deals of 2022 by sale price.
  • This deal closed in the first quarter of last year, transferring ownership of the 906,459-square-foot buildings from LBA Realty to Monarch Alternative Capital/Tourmaline Capital Partners.
  • At a regional level, there were a total of 15 deals from the Western region that made the list, the highest of which being the Madison Centre in Seattle which sold for a total sales price of $730 million.

Key Takeaways Nationally:

  • The 10 largest transactions featured only one NYC sale and were spread across nine different markets.
  • Midtown Manhattan’s 245 Park Ave. was bought by SL Green for $1.77 billion, marking 2022’s largest office transaction.
  • At 1.7 million square feet, 245 Park Ave. was also the largest office property by space to change hands last year.
  • In Cambridge, Mass., 100 Binney St. sold for $1 billion, making it the second-largest sale in 2022.
  • The podium was rounded out by the purchase of the Madison Centre in Seattle for $730 million.
  • NYC’s transactions among the 50 biggest added up to $3.8 billion, followed by Boston’s $1.8 billion and New Jersey with $1.6 billion.

245 Park Ave. is 2022’s largest office deal NYC’s only Top 10 entry

With a sale price of $1.77 billion, 245 Park Ave. was last year’s most expensive office building sale by a considerable margin. Built in 1967, the building has been managed by new owner SL Green since 2018 when it purchased a stake in the property. The real estate investment trust — the largest owner of office space in New York City — then fully acquired the property in September 2022.

In fact, SL Green has already announced major improvement and redesign plans for the property, which are to be spearheaded by Kohn Pedersen Fox. The redesign will mark another major collaboration between SL Green and Kohn Pedersen Fox following their work together on One Vanderbilt.

However, it’s worth noting that 245 Park Ave. was the only New York City entry among the most expensive office deals in 2022. The next-priciest NYC property was The Lipstick Building — just half a mile northeast between 53rd and 54th streets. This time, SL Green did the selling, with new owner Memorial Sloan Kettering Cancer Center paying more than $450 million for the property in the 12th-most expensive office transaction of 2022.

Life Sciences Continue to Propel Office Sales in Boston Metro

Meanwhile, the second-largest office deal last year took place in Cambridge, Mass. — one of the hottest biotech clusters in the nation and the focal point of the life sciences-fueled demand for Boston office space.

Back in April, a partnership between a CBRE Investment Management fund, an institutional investor and a REIT acquired an undisclosed stake in a trophy life sciences building situated at 100 Binney St. for just more than $1 billion. This marked the second and last entry on the list to crack the $1 billion mark. However, the sale of the multi-tenant property in Cambridge’s premier Kendall Square neighborhood equated to more than twice the price per square foot of 245 Park Ave.’s acquisition.

The sale follows a string of major acquisitions in the metro by life sciences REIT Alexandria Real Estate Equities, including the purchase of 401 Park — 2021’s second-largest office sale. Here, biotech continued to drive office sales, with Cambridge also being home to the fifth-largest office sale of 2022 — the acquisition of the Kendall Center (half a mile from 100 Binney St.) by Boston Properties for $600 million.

Seattle, Denver, Phoenix & Silicon Valley Home to Office Property Sales Among 10 Most Expensive Nationally

The remainder of the top 10 list included deals in five additional states, as well as the District of Columbia. Moreover, with the exception of the aforementioned Cambridge, Mass., office deals, all other sales in the top 10 hailed from different markets, thereby highlighting a great degree of diversity in markets that are attractive to investors.

Namely, Seattle’s Madison Centre came in third with a sale price of $730 million. It was sold to Boston Properties by West Coast real estate investment, development and management firm Schnitzer West. Completed in 2017, the Madison Centre features more than 750,000 square feet of trophy Seattle office space, as well as a seven-level, subterranean car park.

Meanwhile, the rising office hubs of Boulder, Colo., and Phoenix also recorded entries among last year’s top sales. In particular, Flatiron Park — a business park in Boulder that boasts a combination of life sciences and tech tenants — was bought by BioMed Realty for a reported $593 million. As such, it’s evident that life sciences investments are playing an increasingly significant role in office deals and redevelopments, even outside cemented biotech markets, such as Boston and Seattle.

Similarly, the largest deal for Phoenix office space was also a complex: A partnership headed by Monarch Alternative Capital acquired four buildings of the Esplanade office park situated in the city’s high-demand Camelback Corridor neighborhood for a reported $500 million.

However, the Bay Area — and Silicon Valley, in particular — was not to be outdone. A year after purchasing the Meta-occupied campus in Sunnyvale, Tishman Speyer sold it for more than $700 million in June 2022, or more than twice its investment the previous year. But, that was by no means the only significant Golden State office transaction of 2022. Further south, the sale of the Los Angeles office property of One Culver for $473 million closed out the top 10 most expensive transactions, while a portfolio sale of San Diego office spaces was just shy of the top 10 most expensive office transactions.

4 Properties Larger Than 1 Million Square Feet Sold Last Year

Totaling more than 1.7 million square feet of Manhattan office space, 245 Park Ave. was also the largest office tower among last year’s 50 most expensive, as well as one of only four that were larger than 1 million square feet of office space.