The fact that Norges Bank has agreed to pay Boston Properties at least $4B (at a 3.8% cap rate) for a minority interest in two trophy offices here and one in New York foretells accelerating values for the best Boston office space, CBRE-NE partner for investment sales Chris Angelone tells us. The "holy cow" deal reflects Boston’s rising profile as a global gateway market that foreign investors see as undervalued compared to places like London and Tokyo, he adds. Perhaps more significant, the same pricing trend is appearing among existing B-Class brick-and-beam buildings.

The deal is a good sign for Boston’s trophy market, RCA director of market analysis Ben Thypin tells us. While a deal like this is rarer than most office trades, it may influence some sellers’ price expectations. Now Oxford Properties’ $2.1B SF purchase of 3.2M SF in downtown office buildings from Blackstone (expected to close soon) only amounts to a relatively modest $714/SF, Ben says. The average selling price of a major office building through Q2 was $510/SF compared to $384/SF in '09, RCA reports.