As investors scour for yields on property deals, San Francisco and Sydney are offering some of the better yields on office transaction opportunities when compared to other major core cities around the world, according to a Savills Studley report released Monday.
San Francisco’s office market bests other core cities with market yields of about 6.97 percent, while Australia’s Sydney came in second at 6.62 percent, according to the study. The cities are a major target for yield-hungry investors in a time when interest rates continue to remain low, pushing institutional investors and others toward real estate.
“Globally, commercial property yields in particular continue to look attractive,” Tony Crabb, Savills' national head of research, said in a statement.
And the U.S. markets in particular offer some juicy returns, particularly in strong secondary markets that can offer even higher yields than what San Francisco and other major metro areas are seeing.
“Core stabilized markets such as New York, San Francisco and Los Angeles provide returns in the mid-5 percent range," Savills Studley said. "Move further afield to Dallas, Washington, D.C., Houston and San Diego and you can achieve yields in the 7 percent range..."San Francisco, Sydney Offer Alluring Office Deal Yields: Study
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