“2018 was an extraordinarily productive year,” Bill Fishel of HFF says when asked about the growth last year. This year, the market continued to see record pricing trends across asset classes, and while there have been changes in investment dynamics related to different asset classes, rent growth almost universally has driven the upward momentum in pricing.

“When you look back at multiples or unlevered IRRs that investors solve to, they really topped out in 2015 or 2016,” Fishel, senior managing director and co-head of the Los Angeles office at HFF, tells GlobeSt.com. “Since then, you haven't really seen investors on best of the best product pricing inside of 5.5% of unlevered IRR. That metric has been consistent. What has really transpired over the course of the past several years, there have been record per-square-foot pricings and all-time high watermarks, but it is because you are achieving the rent.”

This rent growth has been both significant and consistent, along with strong demand. “That is one of the fascinating aspects that we have been able to be party to. In certain instances, investors have traded assets at record high prices simply because on the ground, you are actually effectuating revenue,” adds Fishel. “Assets are being rented out at high numbers, sustaining occupancies and demonstrating demand for space. Holistically, this have been a year of sustained momentum and growth, and high watermark pricing as a result.”