The United States is home to one of the world’s largest commercial real estate markets, accounting for nearly 40% of all real estate globally. The latest data from 2024 show that this market generates revenues in excess of $1 trillion, and 16 of the world’s 30 most competitive commercial property markets are located in the United States.

Early 2024 data show that the average asking price per square foot for US offices stands at $37. Retail averages out to $23 per square foot, and industrial space comes in at just under $8 per square foot. However, there are significant variations in average prices based on location and real estate class.

Here’s a summary of the average commercial property rates in key USA cities:

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In the intricate world of commercial real estate, few topics can be as consequential—yet often misunderstood—as depreciation. At its core, depreciation represents the gradual wear and tear of a property, reflecting its diminishing value over time. While this concept might seem straightforward, its implications ripple throughout various aspects of the industry, impacting not just the physical bricks and mortar, but the financial sheets and investment calculations of those involved.

For property owners, understanding depreciation is paramount. It influences their annual tax liability and shapes the long-term financial strategy behind their real estate holdings. Investors, on the other hand, often scrutinize depreciation schedules and methods to determine the potential returns of their ventures. As for lessees, while they might not directly deal with depreciation calculations, the underlying factors that cause depreciation can indirectly affect lease terms and rental rates.

This article delves into the nuances of commercial real estate depreciation, dissecting its mechanics and significance, especially within the context of the US market. Our goal is to shed light on this pivotal subject, equipping our readers with the knowledge to make informed decisions, whether they’re exploring new office spaces, considering an investment, or simply seeking to expand their understanding of commercial real estate dynamics in the USA.

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Notable Office Market Insights

•  Ongoing recovery is the main theme, continuing the trend seen in most office markets throughout 2021.
•  Positive absorption indicators.
•  Slight increase in rental rates.
•  Marked differences in occupancy levels, vacancy rates and general performance from city to city.
•  Remote working practices are still commonplace in key markets, such as San Francisco.
•  142 million square feet of office space currently under construction.

Lease Rates & Asking Rents

Recent data from Commercial Edge outlines a nationwide rental listing rate average of $38sq/ft in January 2022. These figures may be seen as somewhat inflated due to the number of high quality spaces currently listed due to being vacant, with Class A workspaces being listed at much higher prices.

According to Avison Young, Q4 average rental prices per square foot in gateway markets were as follows:

•  Manhattan: $84 sq/ft
•  San Francisco: $80 sq/ft
•  Washington DC: $54 sq/ft
•  Atlanta: $29 sq/ft
•  Boston: $38 sq/ft
•  Chicago CBD: $39 sq/ft

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There are certain terms you need to be familiar with when renting commercial property in the United States. Here is a list of the most important key words, in alphabetical order.

All-Inclusive

All-inclusive space is available at a fixed fee and typically gives tenants access to equipped workstations, admin/reception support, and meeting rooms. Utilities, janitorial services, and security are usually included.

Class A/B/C

Office space is classified into three classes depending on quality standards and the amenities on offer.

Class A

Class A space is considered best-in-class and is usually located in new buildings that feature the highest standards of construction, design, and amenities. These offices are typically found in prime business locations.

Class B

Class B space offers a functional standard of accommodation to office-based businesses in need of well-maintained space at a reasonable price.

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Commercial real estate was one of the hardest hit sectors following the coronavirus outbreak in 2020. The pandemic and the measures taken to curb its spread brought significant changes to office-based workplaces, driving a sharp and sudden increase in remote work practices. The most immediate consequence of this shift was a softening in rental activity due to the decreased need for physical office space in the short-term. As a result, 2020 ended with a marked decline in take-up volume and an increase in office vacancy rates across the nation.

The United States office rental market entered the new year in a scenario marked by declining rental rates and compromised fundamentals. As we move further into 2021, these trends are likely to remain in place and some markets may begin to feel the full impact of the economic crisis, whereas others will prove more resilient.

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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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Offices.net has been relaunched with an entirely new look and feel.

The newly redesigned site showcases office space available across the United States, enabling businesses of all sizes to find workspace quickly and easily, and to obtain prices and tour available buildings at no cost.

A large part of our focus has been on the site’s new streamlined front-end design, which has:
* simpler navigation,
* clearer mapping systems,
* and upgraded search tools

The changes are much more than skin-deep, with new content and areas all put at the user’s fingertips.

We are proud of the new site and believe it is smarter, easier to use and faster, and will provide a better user experience than ever.

With inventory in 43 states and the District of Columbia, Offices.net fills a vital role in helping people find the right space to establish a new business or grow an existing one. Access to the site is free, and users are not charged for quotes and information. Tens of thousands of companies have used the site to find serviced and conventional office space.

We anticipate that the demand for affordable, flexible office space will continues to increase. While conventional office space with long-term, fixed leases continues to dominate the market, there has been an increase in demand for the turn-key, quickly set-up and flexible approach to office rental that is best provided by serviced offices and executive suites. This is clearly visible in areas like New York, Texas and California, and it is a trend that is increasing in other states in the US.

We hope that you will find the new Offices.net website useful in your search for the ideal work space.

In our interview with Website Planet, we went deeper into the technology used to build our custom website and its key features.

Please let us know what you think, we’d love to get your feedback.

When it comes to eco-friendly residential buildings, New Yorks‘ Battery Park City stands out as a leader in the green building movement.

The very first LEED-certified residential eco-friendly building built in the US was the Solaire, in 2003. This was followed by the Verdesian in 2006 and the Visionaire in 2008, all three were built in Battery Park City and consume thirty five percent less energy and fifty percent less water than your average residential buildings.

A large portion of the BPC eco-friendly buildings electricity supplies are generated by solar panels and include energy efficient appliances. Water is purified and reused and each room is equipped with motion sensors which activate heating, lighting, ventilation and air cons.