NEW YORK CITY—Clarion Partners sees opportunityin office markets beyond the gateway cities, including its homebase of New York, but not because of higher cap rates in thosesecond- and third-tier cities. Instead, it's because these marketsare seeing strong job growth, and particularly in the financialsector.

Even if job growth remains “tepid” at the national level, thismasks “significant variation in recovery rates at the metro level,”according to Clarion's new report on the outlook for office. “Infact, while most traditional financial centers have experiencedweak growth (New York, San Francisco, Boston, Philadelphia, andChicago) or outright declines (Hartford, Stamford), many lower-costnon-traditional financial centers have added financial industryjobs at a rapid pace.”

Among those fast-growing markets are Phoenix, Austin, Nashville,Miami, Dallas/Ft. Worth, Salt Lake City, Jacksonville and Tampa.All have seen double-digit growth in financial services employmentsince the 2009-2011 trough, in contrast to the track record ofmarkets such as New York City, Chicago and San Francisco: lowsingle-digit gains

Continue Reading for Free

Register and gain access to:

  • Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Paul Bubny

Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.