Washington, DC's Office Occupancy Cost Leads 117 CBDs Worldwide

The dichotomy is Washington, DC isn't the world's costliest per sf for rents. "The amount of law firms that leased space this past year was significant. Because they occupy more space per person, its occupancy cost was higher," Ka Cotter, vice chairman of locally headquartered Staubach, explains to GlobeSt.com. Law firms require more space to accommodate legal entourages for partners and senior attorneys, she adds, citing the average workstation in Washington, DC measures 275 sf. In North America, the average is 232 sf and globally, 166 sf.

Other Top Five leaders for workstation costs are London West End, $18,740; Hong Kong, $15,000; Paris, $13,980; and London City, $13,830. The other US markets at the top of the chart are New York City Midtown, $12,620; San Diego, $8,230; San Francisco, $7,640; and New York City Downtown, $7,560. Looking at North America as a whole, Toronto's average cost of $11,020 would push NYC's Downtown from the Top Five roster. In comparison, Dallas/Fort Worth is $5,020 versus $5,120 a year ago, pushing it down to 66 and a three-slot drop from 2005's international ranking.

Cotter says this year's top-ranked cities in the survey showed only one, London West End, reported lower costs, down 3% in the past year. Hong Kong, by comparison, jumped 12 slots due to a 61% spike in workstation costs. The change is attributed to the number of multi-national corporations and investment banks setting up offices "due to the optimistic outlook of that economy," she says. "It's not China, but it's still a gateway."

The average workstation cost is predicated on offices with 10,000 sf or more in a CBD. The researchers factor in rent and full-service costs, including property taxes and insurance. The cost does not take into account market differences in leasing practices, but is measured in US dollars.

Peter Patnaude, Staubach's manager of national research, says the team wasn't overly surprised that Washington, DC surfaced as the costliest. "Not when you take into account taxes, all operating expenses and insurance," he says.