The office space was red hot in Q4, growing at the fastest pace in seven years, Cushman & Wakefield data reveals.
US office markets absorbed 21.3M SF of office space in Q4 '15, up 2% from the previous quarter. For all of 2015, net absorption came in at 81.7M SF—the highest since 2006.
While gateway cities continue to fuel demand, midsized and smaller metro areas picked up in Q4; seven of 10 top absorption cities were "non-gateway markets."
Phoenix, East Bay and Sacramento had standout quarters, making secondary markets "increasingly compelling to both foreign and domestic investors,” chief economist Kevin Thorpe says.
On the construction end, Q4 '15 saw a total of 93.9M SF of new office construction, a 2.9% jump from last year.
On the leasing side, US office rents increased 4.9% last quarter compared to a year ago. Office rents increased in 70 of the 87 markets, the report found.
Overall, these 10 cities showed the highest rent growth year-over-year:
San Jose at 20.3%
New York (Downtown) at 16.7%
Seattle at 16.4%
New York (Midtown South) at 14.7%
San Diego at 14.1%
Austin at 13.9%
Dallas at 13.2%
San Mateo, CA, at 12.1%
San Francisco at 11.9%
Bellevue, WA, at 11%
