The twin tech hotbeds of San Francisco and Silicon Valley newly rank among the world’s ten most liquid commercial real estate markets for 2019 to date, according to new research from commercial real estate giant Jones Lang LaSalle.

JLL’s just released third-quarter Global Capital Flows report found real estate deal volume for Silicon Valley rose 188% for the year-to-date compared to the same period in 2018, boosting its ranking on the global city leaderboard to ninth place, up from 12th place a year ago.

San Francisco transactions rose 39% compared to a year ago, catapulting the city from last year’s 32nd place rank to 10th place this year.

Office properties have been the dominant driver in these markets, accounting for 80% of deals across both locations. Together, Silicon Valley and San Francisco have attracted a combined $19 billion in commercial real estate transactions for the year to date, edging top city New York with $18.3 billion in deal liquidity for the period.

Several landmark sales have driven the upswell in investment. In July, Google bought nine office buildings and surrounding land from Verizon formerly belonging to Yahoo! in a blockbuster $1 billion acquisition spread across two separate transactions.

Also this year, Atlanta-based real estate investor Jamestown—which owns New York City’s Chelsea Market along with a portfolio of global real estate holdings—bought San Francisco’s Levi’s Plaza for $823 million, marking the single largest U.S. office transaction during the quarter.

Big flip

Earlier this month, it was announced that Market Center, the Market Street two-tower complex that formerly housed Chevron’s corporate headquarters, would be sold for $722 million to New York developer Paramount Group. Seller Blackstone Group, which has only owned the buildings since 2016, will net a 41% profit on the sale.

”Healthy occupier fundamentals have underpinned investor appetite for office assets in both markets,” JLL’s analyst team wrote. “Vacancies are in single digits and at their lowest point in the current cycle, driven by demand from technology and co-working tenants. This has helped boost rents, with San Francisco boasting rent growth in excess of 16%, making it one of the three best global performers this year.”

With current development pipelines in San Francisco and Silicon Valley at a tight 4% and 9% of existing stock, respectively, JLL’s analysts anticipate that strong price performance in the two tech-heavy markets will continue.

Fast fashion

Notably, neither San Francisco nor Silicon Valley rated among the top ten cities for cross-border property investment. The only West Coast city to win that distinction was Seattle, Washington—site of a recent spree by Spain’s Ponte Gadea, the real estate investment firm owned by fast-fashion tycoon Amancio Ortega, co-founder of Zara’s parent company Inditex.

Earlier this month, Ponte Gadea bought the Arbor Blocks Class A office property that lately housed Facebook, adding to a long list of 2019 buy-ups including a $740 million acquisition in March of the Troy Block Class A office towers most recently occupied by Amazon.

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