A combination of companies moving downtown and minimal available high-rise space are contributing to rising office rents in the CBD, according to a new report from Colliers. The effect is being felt across all building classes.
The Colliers report shows leasing activity was strong in Q3 after a slow start to 2015. The major office developments in the pipeline like River Point and 150 N Riverside are already competing for tenants, while landlords of existing buildings are upgrading amenities to attract lessees. This has resulted in an average direct asking rental rate in the CBD of $36.16/SF.
The volume of absorption, low vacancy rates (now at 12.3%) and the record sales of office buildings means the CBD will remain a landlord-dominant market until at least early 2017, when 2.2M SF of office space is expected to be delivered. Read the full report here.
