No. 1 New York City. Share of employees in tech occupations: 6.9%. Flex share of inventory: 3.6%.
Houston is inching forward. Large sublease availabilities from the energy sector downturn still overshadow the market but are slowly diminishing. Vacancy is still by far the highest among the top 10 markets. Photo of Houston.
Demand is on the rise in Atlanta and recent deliveries are leasing up. This is giving developers confidence to move forward with more projects in Midtown. Photo of Atlanta
Boston continues to outperform with momentum growing further in Q1 2019. While the heady pace may slow as large tenant requirements come off the table, there is still room to run. Photo of Boston
The West Loop continues to lead the Chicago market with the highest rents and healthy leasing activity. The largely vacant 2.2 million square foot Old Post Office project in River North is close to completion and will provide a unique challenge to the market. Photo of Chicago
Construction activity in Dallas is minimal by historic standards. Outside of Far North Dallas, limited site availability and high land prices will restrict future development. Photo of Dallas.
Large leases are being struck in Los Angeles by tech and coworking firms. While new supply pressures are alleviating on the Westside, Downtown remains challenged. Photo of Hollywood Boulevard.
The San Francisco Bay Area still has the highest rents and lowest vacancy rate of the top 10 markets. Tech demand continues unabated with eight large leases signed in the first quarter. Photo of San Francisco.
Seattle stalled in the first quarter. Vacancy moved up but is still the third-lowest of the top 10 markets. Construction activity remains elevated but more than 70% of the space is pre-committed. Photo of Seattle
Washington, D.C. is seeing strong leasing from coworking firms. New supply being added in the District remains the market’s principal concern, but developers continue to press ahead. Photo of the Washington Monument.
The first quarter of the year is usually the most subdued and Q1 2019 proved no exception, according to an upcoming report by Colliers International, Absorption slowed for the most part across the major office markets in the US, but Colliers hastens to say, this is no cause for concern. In seven of its top 10 US office markets, there was positive net absorption for the quarter, with levels rising from the prior quarter in three of the markets.
There are several trends, many long-standing ones, that are currently shaping office markets.
Leasing, for example, remains highly concentrated in just two sectors: coworking and tech. Coworking and flexible workspace operators leased over one million square feet in Manhattan alone. Major leases were signed in Atlanta, Boston, Los Angeles and Washington, DC, mostly by WeWork.
At the same time, vacancy rates rose in five markets as new supply outpaced absorption. These increases were mostly modest and, in some instances, up from unsustainably tight levels.
Average asking rates increased in eight markets and held firm in the remaining two. New highs continue to be set in Boston and Manhattan.
Finally, any supply-side concerns are limited and highly localized with the principal pressure points in Los Angeles and Washington, DC.
For more details about these trends in the individual markets, check out our slideshow.