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The country’s top 10 office markets—based on total square footage and global investor demand—continued to post healthy rent gains in Q3, though six of the top 10 metros in the country had an increase in vacancies during the same period, according to Colliers International.
The commercial real estate services firm reported in its Q3 Top Office Metros Snapshot that Manhattan, Washington, DC, Dallas, Boston, Seattle and Houston all had increases in vacancy rates for a myriad of reasons, including a slight decline in tech leasing activity, the repositioning of large law firms' office needs and struggling economies in markets dependent on the energy sector.
Overall vacancy rates for core submarkets in the sector remained unchanged at 10.3% on both a quarterly and an annual basis, Colliers reports.
Colliers International president of national office services Cynthia Foster tells Bisnow most of the positive absorption the sector is seeing stems from new tech companies moving into urban areas.
“Some people are saying that Millennials will age into childbearing years and move into suburban locations, but were seeing continued strength in the urban trend,” Cynthia says. “Whether it’s tenants like GE, McDonald's, Facebook and Grovo…one of the main themes we’re seeing is continued demand for urbanization.”
Below is a quick snapshot of each market’s absorption rates, vacancy rates and average asking rents as of Q3.
Manhattan, NY
Absorption: -306k SF
Average Rents: $73.85/SF
Vacancy Rate: 6.4%
Los Angeles
Absorption: 571k SF
Average Rents: $35.76/SF
Vacancy Rate: 15.5%
Washington, DC
Absorption: -442k SF
Average Rents: $46.08/SF
Vacancy Rate: 13.8%
Chicago
Absorption: 301k SF
Average Rents: $37.50/SF
Vacancy Rate: 10.6%
Atlanta
Absorption: 552.3k SF
Average Rents: $27.22/SF
Vacancy Rate: 12.4%
San Francisco
Absorption: 798.6k SF
Average Rents: $74.85/SF
Vacancy Rate: 5.8%
Dallas
Absorption: -225.3k SF
Average Rents: $29.63/SF
Vacancy Rate: 12.7%
Boston
Absorption: -152.8k SF
Average Rents: $55.90/SF
Vacancy Rate: 11%
Seattle
Absorption: 611.3k SF
Average Rents: $35.23/SF
Vacancy Rate: 8%
Houston
Absorption: -524.3k SF
Average Rents: $40.98/SF
Vacancy Rate: 6.8%
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