Office Rent Growth Slows in Key Markets

Spotify’s headquarters lease at 4 World Trade Center was one of Manhattan’s largest office deals in Q1. (Photo: Joe Woolhead)

NEW YORK CITY—Rent growth continued in the first quarter for most of the nation’s top 10 office markets, but the pace is slowing, Colliers International said Thursday. The firm expects the slowdown to continue as we reach full maturity on the current cycle, notably in markets that are seeing a great deal of speculative construction.

Moving from the general to the specific, Q1 performance varied from market to market. In Washington, DC, for example, asking rents are rising due to the influx of new product, but Colliers also expects fundamentals to be pressured by the ramp-up of spec development in the District and its metro area.  All but one of the DC market’s 10 largest Q1 leases involved a reduction in occupied space, while six of the 10 largest in Manhattan saw tenants taking new space.