Growing Office Rents May23

Growing Office Rents

CBRE recently released the Spring 2017 North America Suburban Office Trends Report. Econometric advisors foresee positive net absorption and rent growth will continue throughout suburban office markets in the United States. A handful of cities stand out for their growth. For more than 27 quarters, the U.S. suburban office vacancy rate has refused to rise. Sluggish new supply in major suburbs cannot keep up with increasing tenant demand. Even suburbs that were slow to recover from the recession are now showing luster.  CBRE reports that several Florida markets, Milwaukee, Phoenix, and even Detroit posted year-over-year vacancy rate decreases of 200 bps or more in Q4 2016. Submarkets that cater to thriving industries, such as technology, stand to benefit the most from this trend. Major suburbs that offer energy efficient spaces and top-end amenities will also do well. The following 10 markets are slated for success throughout 2018. Suburban Atlanta Increasing by 10.1 percent, rates for Atlanta office space for rent ended 2016 at an average of $22.47 per sq. ft. Atlanta Business Chronicle reports that some areas of the metropolitan area just made history by breaking the $50 per foot barrier. Cambridge, Mass. The vacancy rate declined by 180 basis points by Q4 2016, ending at 3.8 percent. The average price came in at $65.26 per sq. ft. The new city of Cambridge has grown in large part due to the presence of technology powerhouses, Microsoft and Apple. The presence of academic professionals, employees of Cambridge Innovation Center and WeWork also contribute to the high demand for office spaces. Suburban Fort Lauderdale, Fla. At the end of Q4 2016, the suburb yielded 8.3 office rent growth, at a price of about $29 per sq. ft. New construction and the conversion of some retail spaces...