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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Thanks to its academic status and thriving innovation scene, Boston is considered one of the top business hubs on the East Coast. In particular, the city and the surrounding areas have become the destination of choice for many startups, not only due to the availability of talent and funding, but also given the quality and diversity of office accommodation options. 

In this article, we offer detailed insights into the cost of renting office space in Boston, district by district. 

Office market trends in Boston

Over the past decade, the Boston office space market has seen fluctuating performance, witnessing shifts in demand and supply. Initially, the growth of the tech and life sciences sectors contributed to the expansion of the office market, with the development of new and modern spaces that could accommodate the requirements of these occupiers. Low vacancy levels translated into increasing asking rates, in particular in areas like East Cambridge and Sommerville, while other tenants were pushed out of the market as they couldn’t always compete with the budget of occupiers like MIT, Novartis, and Google. 

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Washington DC is one of the largest US office space markets by square footage, which means local businesses are never short of options when it comes to finding a suitable office unit in the nation’s capital. For anyone interested in setting up an office or relocating to the city, we have created an overview of the costs involved in doing so.

The business environment in Washington DC

Washington DC has a thriving business ecosystem boasting excellent tech infrastructure, unparalleled access by road, sea, railway, and air, with three major airports, and office space options that can accommodate anything from large headquarters to micro-enterprises.

In addition, local companies enjoy access to a highly educated workforce, the presence of influential industry players in various industries, and several incentives to lessen the financial impact of running a business in the city.

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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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As one of the world’s leading business locations, New York City attracts office-based businesses with a wide range of requirements and budgets. In this article, we offer an in-depth analysis of the costs associated with renting office space in the Big Apple, so you can make the best decision when establishing your business footprint in the city.

Understanding the factors that influence office space costs

The cost of leasing office space in New York City‘s office market is influenced by a number of factors, including:

– Location: Although Manhattan still tops the list in terms of prestige, other areas fare better for ease of commute, as is the case of Brooklyn, and their popularity is reflected in rising prices when compared to the rest of the New York office space stock. 

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The 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 »

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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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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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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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 »