Posts Tagged ‘Office Rental’

United States Commercial Property Prices Per Square Foot

February 28th, 2023

Smiling office colleagues conduct a meeting discussing United States commercial property prices per square foot. Three people are seated with their laptops open in front of them on the meeting room table while one woman in a grey top stands at the head of the table addressing her gathered colleagues - Offices.net.

The United States is home to one of the world’s largest commercial real estate markets, with an estimated revenue worth of approximately $1.2tr. In terms of size, industrial space is the largest sub-market with 21.7bn square feet, followed by retail with 14bn, and offices, which account for 11.8bn.

In Q1 2023, the average price per square foot for US offices was just over $38. Retail averaged out to $18.09 / square foot, and industrial space came in at just under $8 / square foot. However, there are significant variations in average prices based on location and real estate class. Here is a summary of average commercial rates in key USA cities:

  •   New York: Average gross rates for metro New York offices are $77 / sq ft / year. Industrial space averages $19 / sq ft / year.
  •   Los Angeles: $44 / sq ft / year for offices in the metropolitan area and $11 / sq ft / year for industrial premises.
  •   Miami: In the same range as Los Angeles, at $46 / sq ft / year for offices and slightly lower for industrial space ($8 / sq ft / year).
  •   Boston: $38/ sq ft / year for metro offices, rising to $80 in Cambridge. Industrial properties average $10 / sq ft / year.
  •   Philadelphia: $32 / sq ft / year for city center offices, $27 for suburban space, and $6 / sq ft / year for industrial properties.
  •   Atlanta: Slightly under $30 / sq ft / year for offices with a rate of $35 in Downtown Atlanta. Industrial space is charged at an average of $5 / sq ft / year.
  •   Chicago: Approximately $33 / sq ft / year for office space, rising to averages above $40 in The Loop. Industrial premises average $6 / sq ft / year.
  •   Dallas and other urban centers in Texas: between $25 and $30 / sq ft / year, whereas industrial rates are below $5.

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US Office Market Trends 2022 – Statistics, Challenges and Outlook

February 24th, 2022

man looks over u.s. office market trends 2022 report at offices.netThe US office market struggle to get back on its feet for most of 2021, despite the year starting with the expectation that this arm of the commercial real estate market would be on its way to recovery by Q3 to Q4. Ultimately, the emergence of the Delta and Omicron variants of COVID-19 resulted in forecasts being revised, and the recovery horizon was pushed to 2022.

We’ve collected a brief overview of the trends, figures, and projections for the 2022 US office space market below, check back frequently in the year ahead for more insight into industry trends and recovery projections.

Economic Indicators Tipped to Improve

There are many factors influencing office market performance, but macro-economic indicators are some of the most critical. As we settle into 2022, a decline in unemployment is expected to be one of the most important factors underscoring the recovery of the office market. Recent data from the U.S. Bureau of Labor Statistics outlined a small uptick in unemployment in January 2022, moving from 3.9% at the end of 2021 to 4.0% to end the first month of the new year. Read the rest of this entry »

Office Features to Look Out for in the Second Half of 2021

June 23rd, 2021

The US office market has been dramatically transformed by the changes to work practices and mobility restrictions implemented throughout the course of 2020 and early 2021. Whilst it was predicted that the market would slowly rebound starting in recent months, the demands of office occupiers will have changed substantially since the start of the COVID-19 pandemic. Below is a brief overview of the main things to look for in an office space during the second half of 2021.

Office Layout

Flexible spaces

Flexibility remains a key consideration when choosing an office, not only in terms of lease terms, but also office layouts. Many office-based companies are still unsure about their ability to retain staff in the face of reduced revenue, combating this uncertainty by implementing rotating shifts or flexible work hours, two factors which have ultimately led to businesses struggling to identify the total headcount in the office at any given time.

This uncertainty will lead to an increase in demand for modular spaces that can be adjusted depending on the number of people present in the workplace. These kinds of dynamic layouts have been an option for several years, often going hand in hand with trends towards multi-functional office spaces. Some of the main elements that typify flexible workspaces include:

  •  Blurred indoor to outdoor transitions.
  •  Movable walls and room dividers.
  •  Lightweight or mobile office furniture.
  •  Adjustable or movable lighting.

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United States Office Space Rental Rates 2020

December 22nd, 2020

The United States office market is characterized by its wide range of properties, ranging from affordable shared spaces to expensive trophy offices in some of the world’s most desirable business locations. In mid-2020, average gross rates for offices nationwide stood at $35 per square foot with the priciest offices located in New York and California. Within these states, the sub-markets commanding the highest rates are:

  •   New York: Midtown Manhattan at $87 per square foot, specifically in Chelsea, the Plaza District, and Gramercy Park.
  •   California: The Shoreline/Mountain View area, in which prices reach $130 per square foot, followed by Santa Monica and the SoMa district of San Francisco.

Average asking rates in other prime office markets are as follows:

  •   Seattle: $70 per square foot, higher in Lake Union and the CBD.
  •   Washington DC: $55 per square foot.
  •   Cambridge and Boston: $40 and $80 per square foot, respectively.
  •   Los Angeles: Averaging $45 per square foot.
  •   Chicago: Exceeding $40 per square foot in the West Loop.
  •   Raleigh-Durham: $35 per square foot for CBD properties.

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United States Commercial Property Prices 2020: Per Square Foot

December 15th, 2020

An updated version of this post can be found by clicking here.

The United States is home to one of the world’s largest commercial real estate markets, with an estimated worth of approximately $950bn. In terms of size, industrial space is the largest sub-market with 21bn square feet, followed by retail with 13bn, and offices, which account for 11bn.

In Q2 2020, the average price per square foot for US offices was just over $35. Retail averaged out to $18.09 / square foot, and industrial space came in at just under $8 / square foot. However, there are significant variations in average prices based on location and real estate class. Here is a summary of average commercial rates in key USA cities:

  •   New York: Average gross rates for metro New York offices are $81 / sq ft / year. Industrial space averages $19 / sq ft / year.
  •   Los Angeles: $44 / sq ft / year for offices in the metropolitan area and $11 / sq ft / year for industrial premises.
  •   Miami: In the same range as Los Angeles for CBD offices and slightly lower for industrial space ($8 / sq ft / year).
  •   Boston: $39/ sq ft / year for metro offices, rising to $80 in Cambridge. Industrial properties average $10 / sq ft / year.
  •   Philadelphia: $36 / sq ft / year for city center offices, $27 for suburban space, and $6 / sq ft / year for industrial properties.
  •   Atlanta: Slightly under $30 / sq ft / year for offices with a rate of $35 in Downtown Atlanta. Industrial space is charged at an average of $5 / sq ft / year.
  •   Chicago: Approximately $33 / sq ft / year for office space, rising to averages above $40 in The Loop. Industrial premises average $6 / sq ft / year.
  •   Dallas and other urban centers in Texas: between $25 and $30 / sq ft / year, whereas industrial rates are below $5.

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Office Space Options: Startup Space and Business Incubators

February 24th, 2017

The following is the second in our series focusing on providing information on the various types of office space available, from business parks to hot desking, conventional office accommodation to shared coworking options.

What is a startup?

Before discussing the qualities of a startup space or incubator, it is worth determining exactly what a startup is.

Theoretically, any new business whose market is not defined by location could be considered a startup. (For example, a newly opened restaurant is indeed a small business, but, because the market is location based, it is not a startup.)

In terms of use in today’s economy, a startup is a small business, usually technology oriented; startups generally provide service to a worldwide market. Tech startups are not confined by location or operating hours only by how many consumers or clients they can reach.

Incubators

In the non business world, an incubator is a warm safe place for a baby or a baby chick to get a nice healthy start to life. In the business world, an incubator is much the same. Incubators provide services that help startups get through those trials faced by new businesses.

Services

Some of the services provided by incubators are:

  • Legal: things like proprietary guidelines, creating bylaws or business plans, and navigating the regulations of your industry.
  • Business management: basic accounting services, business organization tips, company setup, and help with building and framing the identity of your startup.
  • Marketing: market research and networking.
  • Funding: access to angel investors or venture capitalists and help in locating other sources of funding for your startup.
  • Networking: introduction to others in your industry, networking with mentors, investors, and industry specialists.
  • Site services: an office or team workspace, access to high-speed internet, copying and faxing, and other clerical or administrative services. Read the rest of this entry »

USA Office Market Forecast 2017

February 2nd, 2017

USA Office Buildings offices.netOverview of USA Office Market

During 2016, the USA office market was marked by a climate of cautious optimism and moderate growth across the board. This was mostly evident in office rental rates, which increased by a modest 0.1 per cent or even declined in cities like Chicago, New York, Washington and San Francisco. This was coupled with a slow-down in leasing activity, as net absorption rates only reached 6.5 million square feet during the last quarter of 2016. The bulk of lease transactions consisted of small and medium-sized office properties, and the total number of leases exceeding 500,000 dropped by 43 per cent.

Key market indicators (such as take-up, vacancy, and availability rates) were linked to the performance of those industry sectors that make up for the bulk of office occupiers in the USA. 2016 saw a tightening of the labor market in the tech sector, driving vacancy rates down to break the 10 per cent barrier for the first time. This offset the relative stagnation in activity coming from occupiers involved in financial services, legal, and government.

Important figures that reveal the market’s performance during 2016 included:

– A total inventory in excess of 137 million square feet

– Total vacancy rates of 16.9 per cent

– Annual net absorption above 1.1 million square feet

– Nationwide average asking rates $23.91

– Office space under construction 4.9 million square feet, of which 53.7 per cent is already pre-leased

USA Office Market Forecast 2017

 

USA Office Market by City

Mid-sized markets were among the best performers in the year that has just ended. Portland, Nashville, Salt Lake City, and San Antonio were characterized by occupancy increases that averaged 3 per cent. In San Francisco, market indicators were also positive despite the fact that occupancy growth levels dropped from 2.9 to 1.1 per cent. Other regional office markets that did well included Austin, Silicon Valley, and Seattle. In these markets, occupancy growth averaged 2 per cent. Read the rest of this entry »

Office Space Options: Business Centres and Business Parks

January 9th, 2017

The following is the first in our series focusing on providing information on the various types of office space available, from business parks to hot desking, conventional office accommodation to shared coworking options.

Business centers and business parks are locations with several businesses grouped together, like a shopping center, but for commercial and office based businesses. The typical business park is a development of land and buildings set aside exclusively for the use of offices of all sizes and designs.

Business Parks in the Suburbs

Business parks are found in cities, but are more frequently located in suburban areas. Developers build a variety of sizes and designs of office spaces in one location. Available spaces will vary from a single occupancy 400 square foot office space to a 50,000 square foot warehouse space, all on one site. Occasionally, within the business park, you’ll find a larger building with several offices these are frequently owned or managed by a single entity. Owners of the larger building typically rent the spaces to small businesses as conventional, serviced, or virtual offices.

A business park is in stark contrast with the big city high rise type business locations. Business parks are often designed to resemble a university campus or suburban neighborhood. There are one or two story buildings, instead of twenty story skyscrapers; there are green spaces; there may be fountains or park benches in the surrounding areas. These business parks are ideal locations for service or retail based businesses that need a location for customers to visit.

Some business parks become so large and welcoming to businesses that they begin to resemble a small town. As the success of businesses located at a specific park grows, more and more businesses choose to locate there. From that point it may seem inevitable that neighborhoods and communities begin to sprout up in the area.

The Appeal of Business Parks

For many companies, cost effectiveness proves to be the drawing feature to a business park space. The spaces are usually more affordable than commercial or retail spaces in other locations. Often a group of similarly based businesses, such as medical specialists, will locate in a business park creating a network of services that appeal to consumers.

Typically, the companies located in a business park will be diverse, varying from service based industries, such as computer repair, for example, to investment firms that are closed to the public. The diversity of the business park is limited only by the amenities offered by the developers. Business parks can help create a concentrated, affordable non-industrial office district and contribute to the communities in which they are constructed.

 

For information on business centre and office accommodation opportunities across the US click here.

 

San Francisco: Commercial Real Estate, Office Space Trends and Statistics

March 16th, 2015

The city of San Francisco is one of the top business hubs in the Americas. The local business community is among the most vibrant and successful at global level, partly due to the huge pool of talent available in the city and its surrounding areas. A large number of Fortune 500 companies are based in the area, and business opportunities exist for enterprises operating in a wide range of sectors, from aerospace to health care and including electronics, consumer goods, retail, and telecommunications.

The undeniable appeal of San Francisco as a business location has attracted hundreds of prospective entrepreneurs to the area. If you are considering setting up a business in San Francisco, take a look at our detailed guide to commercial property in this thriving Californian city.

Key Trends in the San Francisco CRE Market
For the past two years, the local commercial property market in San Francisco has shown a variety of healthy indicators.
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Spotlight on Business in Houston

October 30th, 2014

Since the discovery of oil in Houston, Texas in 1901, the city has relied on energy revenue for its growth and survival. That means that Houston followed the trends of energy prices, which took nose dives in the 1970’s, 1980’s and 2000’s. But each time, Houston was able to bounce back and open up new areas of energy exploration and refining that have allowed the city to grow. As time has gone by, Houston has learned to diversify its economy and a new Houston is starting to emerge from under the shadow of the energy industry.

Major Industries in Houston 

One of the industries that Houston has turned to for balancing out the energy sector is the chemical manufacturing industry. Today, the city of Houston and its associated industries produce almost 40 percent of all of the basic chemicals used by domestic and international industry. It is estimated that nearly 40,000 people in Houston area work in the chemical manufacturing and refining industry.

Along with energy and chemical manufacturing, Houston also relies heavily on the technology sector for jobs. The space exploration and engineering industry in Houston employs well over 17,000 people as scientists and engineers. The Houston economy benefits significantly from its abundance of high-paying jobs.

Key Economic Drivers in Houston

While Houston benefits greatly from advances in its energy and chemical industries, one of the prime economic drivers for the city’s economy is its growth in the service industries. Nearly 16 percent of the Houston working population work in insurance sales, real estate and personal finance. This number continues to grow and so does the revenue generated by these industries. Read the rest of this entry »