According to the report, Washington, DC made a sizable jump in occupancy costs--24.8% per workstation from the previous year--leaving it in fourth place on the 2005 list of major metropolitan areas in the world with the most expensive office rates. Rankings are based on total occupancy costs per workstation.
The increase moved the District up from number nine on the list in 2004. According to Delta Associates' Year-End 2004 Office Market Report, the average effective rent among class A office properties in the District for 2004 was $41.15.
Globally, London is the leader of the pack. However, on the domestic front, Washington, DC is joined by Midtown Manhattan, Boston, San Diego and Downtown New York on the North America top five listing.
While Lower Manhattan was in the top five, the report found that it showed subdued growth in demand for space, reflected by a 15% drop in occupancy cost per workstation. Other cities with declining occupancy cost per employee included Philadelphia, which was down 29%, and Houston, down 12%.
"Overall, real estate markets in North America continue to improve, with more than two-thirds of all locations anticipating an increase in occupancy costs," says Staubach Co. president and COO Elysia Ragusa. "Now is the time for tenants to take advantage of lower rental rates, before markets fully recover."
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