Total sales volume exceeded $4 billion in the second half, contributing to the largest year since 2007. Industrial sales exceeded $1 billion in H2, a new high for the property type. Multifamily sales also surged to reach the highest half since 2004. Demand for investment properties in San Diego has driven prices per sq. ft./unit to historic levels. Every type except office reached their historic high in price per sq. ft./unit in H2 2019, with office reaching its historic peak in H1.
Blackstone was the most active investor in H2 2019. The large institutional investor acquired eight properties totaling $409 million, spanning industrial, multifamily and office types. LaSalle was close behind with $406 million in investments, including the purchase of a partial stake in Illumina World HQ from Alexandria Real Estate (ARE). ARE was active in H2 2019, selling $339 million in assets and partial stake in four properties. The major life science owner acquired more than $370 million in assets and partial stake in four other properties, some of which are likely targets for conversion, redevelopment or new construction of Class A life science space.
Capital should remain abundant in 2020, but overall sales volume will depend on the number of sizable opportunities that hit the market. A presidential election could also halt some activity later in the year as investors await results, but borrowing rates are expected to be at or near all-time lows for much of the year. With abundant activity in gateway markets, 2020 may also be when foreign investors and major national institutions who are not currently active in many secondary markets start dipping into markets like San Diego.