June 25th, 2019
New York City is home to more than 500 million square feet of office space, which make it one of the world’s largest office markets. While that seems a large amount, space shortages are a reality, and not only in terms of the offices available. Rising rental values mean that many New York companies are choosing to downsize or to make changes to their office layout to maximize space and cut costs. Nowadays, it is not uncommon for companies to move to office premises that are up to 25 percent smaller, yet the amount of people sharing that space remains the same.
Another way in which the amount of office space allocated to each staff member is getting scarcer is because of current trends towards open plan offices and collaborative spaces. The concept of the sharing economy has extended into office design and space allocation, with shared workspaces becoming increasingly more common, which means individual desks are being replaced by large long tables. In fact, New York leads the nation’s provision of shared office space, and even in traditional offices there have been changes in the desk space – meeting or collaborative space ratio, with the balance switching towards the latter.
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February 24th, 2016
Bolstered by a robust economic performance, the office market in Washington DC delivered a fine performance throughout 2015. Unemployment levels in the DC metropolitan area were at their lowest since 2008, reaching figures well below the US national average (4.3 per cent vs 5 per cent). These conditions have helped shape a real estate market that is predominantly favourable to landlords, as the following trends demonstrate:
Rental values continued their slow recovery throughout 2015 and are currently set around the $50 / square foot mark.
Availability rates for all types of office space went down to 16.3 per cent. Towards the end of 2015, approximately 13.2 million square feet of office space were vacant.
The most significant transactions involved lease renewals or re-lets, although there have been several large sale transactions taking place in the city’s East End too.
Annual absorption levels were high at 887,000 square feet, and construction activity increased by 22 per cent on a year-on-year basis.
However, here has modest decrease in vacancy rates, especially as far as Class A space is concerned. Vacancy rates for these types of office properties still remain relatively high at 11.5 per cent. Vacancy levels for Class B and Class C space in Washington were slightly lower at 10 per cent.
Washington DC Office Market: 2015 Key Facts & Figures
During 2015, vacancy rates for all types of office space in Washington went down to 10.5 per cent, pretty much in line with the city’s historical average of 10.7 per cent. At the same time, net absorption levels increased by a staggering 185 per cent, going from 198,000 square feet in 2014 to 398,000 by December 2015. Nearly half of the transactions involved office stock in Washington’s CBD, which clearly outperformed all other sub-markets. This is attributed to the ongoing influx of new tenants relocating from secondary office locations into the CBD. This trend began to be evident in 2014 and has been solidified over the past 12 months. Read the rest of this entry »
February 17th, 2016
An in depth look at how the Manhattan office space market has fared in 2015 and forecasts for this coming year.
Manhattan Office Market Overview of 2015
Over the past 12 months, federal economic policy has been focusing on expansion, driving an increase in employment rates, especially as far as office-based employment is concerned. This type of employment grew by 2.6 per cent in just 1 year, and prompted a considerable increase in demand led by occupiers in the Manhattan financial services sector. In certain Manhattan sub-markets (such as in Midtown South), strong demand from tenants in the TAMI sector (technology, advertising, media, and information) was also evident.
At the end of 2015, total office stock in Manhattan was just under 395 million square feet, of which 28 million were vacant. Total transaction volume amounted to more than 28 million square feet, one of the highest figures of the past 10 years. However, there was a slight decline in transaction volumes in downtown Manhattan, where transactions mostly involved small and medium-sized office properties.
Manhattan Office Market: Key Facts & Figures
During 2015, office vacancy rates in Manhattan went down from 9.3 per cent to 8.5 per cent. This decrease equals to 90 basis points on a year-on-year basis, and brings vacancy rates closer to Manhattan’s historical average of 8.9 per cent. In Midtown South, vacancy rates were markedly lower at 6.2 per cent, whereas in downtown Manhattan they went down by 30 basis points to 9.4 per cent. Read the rest of this entry »
October 6th, 2015
Centered on the north-central region of the country, the Midwest United States includes 12 states including Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin. Although major urban centers such as Chicago are known around the world as key economic drivers, the Midwest is also home to several smaller cities that provide promising conditions for new businesses. WalletHub’s 2015 ranking of the best cities to start of a business in the United States included six Midwestern cities in the top 20. The ranking used a number of metrics, from the five-year survival rate of businesses to the affordability of office space.
Springfield, Missouri ranked as the best Midwestern city to start of business in the United States, according to the 2015 study. The city also placed first nationally in terms of access to resources, including financing and affordable office space. Known as the Queen City of the Ozarks and the Birthplace of Route 66, Springfield is home to the Missouri State University and Drury University. The third largest city in Missouri is the economic hub of an area that spans 27 counties in Missouri and neighboring Arkansas and is home to some 1 million people. The economy is based on health care, manufacturing, retail, education and tourism. The city has also been recognized for its high quality of life, and in 2008 it was among the best communities for young people by the America’s Promise Alliance and relocating families by Worldwide ERC.
Sioux Falls, South Dakota
The same ranking found that Sioux Falls was the sixth best city to start a business in the US. With a growing population, the city also ranked second in terms of the best business environment in the United States. It was also named as the next big boom town by The Atlantic in 2013. The largest city in South Dakota, Sioux Falls is a diverse economic center focused on financial services, health care and retail. Sitting on the crossroads of interstates 90 and 29, the city is within a day’s drive from many major cities in the Midwest. The lack of a state corporate tax has helped attract a number of financial companies to Sioux Falls, including Wells Fargo and Citigroup. Read the rest of this entry »
May 6th, 2015
Overview of the office market in Texas
According to a recent Cushman and Wakefield report, the office market in the Lone Star state is robust and has been marked by a consistently high demand for Class A space and an expanding occupier base. This is particularly true of the Dallas-Fort Worth area, where a thriving job market has prompted several corporations to relocate to larger premises.
Towards the end of 2014, average vacancy rates in this area had dropped from 17.9 per cent to 16.6 per cent, thus reaching their lowest levels since 2010. By the end of Q4 2014, more than 13.8 million square feet had been leased or sold in the Dallas-Fort Worth area.
Strong demand in this area is also reflected in the speculative development pipeline, where 65 per cent of the more than 6 million square feet of office space under construction has already been pre-leased.
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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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January 12th, 2015
For several decades, Houston has been considered one of the most successful economies in the southern United States. In fact, and according to Forbes, Houston is the third best place to do business in the country. The city’s bustling and highly diverse economic scene is largely driven by the energy industry, and other important sectors include manufacturing, research and development, aerospace, information technology, and health care.
Being one of the most important corporate centers in North America, the city of Houston is well equipped to accommodate the real estate needs of existing and prospective businesses. This article looks at the most important trends affecting the commercial property market in Houston, having a special focus on the office market.
Key trends and developments in the Houston commercial property market
Generally speaking, over the past five years the Houston commercial real estate market has been characterised by high activity and construction levels and by increasing absorption rates. By the third quarter of 2014, the local market had absorbed 4.4 million square feet of office space, and by the end of the year a further 17.3 million sq ft of space were under development. The vast majority of new office developments were geared towards the needs of the energy sector, having a significant amounts of floor space being built at the city’s ExxonMobil campus and having a large number of pre-lease transactions closed by multinationals like BHP, Shell, and Nobel Energy.
Due to increased demand, citywide rental rates have been steadily climbing, and during 2014 alone they grew by an average 10.6 per cent. Higher increases were evident in commercial properties in the city’s business district. Vacancy rates have decreased from 12.9 per cent in 2013 to 11.9 per cent in 2014. While year-on-year leasing activity levels decreased during 2014, the figures are set to increase once again during the following 12 months. Read the rest of this entry »