Top 7 Cities for Office Space Growth

Over the last year, Colliers’ Q1 Office Market Outlook tracked several U.S. cities to determine their growth in terms of rented square feet, vacancy rates, and average rental price per square foot. Some cities have been dominating the market with the help of tech companies (foe example East Bay, Baltimore and San Francisco, California), and for many reasons. According to Colliers, tech companies are interested in San Francisco for their office market. Some of this interest comes from the location, which for some companies will help cut down on transportation logistics for employees (i.e. Facebook) or because the company will be hiring in the near future (i.e. Uber).  Regardless, San Francisco is a hot spot for office space demand, with the East Bay market of San Francisco currently topping the chart.

The chart above was constructed to illustrate the seven cities that experienced double-digit growth in rent over the last year. Ranked by highest growth in rent, East Bay, San Francisco clearly dominates because of the increase in tech companies in the surrounding area. The vacancy rate is also very low.  Furthermore, the properties with lower vacancy rates tend to have higher average costs of rent per square foot ($40 - $80/sf), while cities with higher vacancy rates average around $25/sf.  Overall, trends show that cities that cater to tech companies are bound to experience higher growth rates in the long run.

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Written by Front Street Intern Brett Murphy