U.S. Office OccupierView
11
CBRE Global Research and Consulting U.S. Office OccupierView Q2 2013 LEASE RATE $26.96 PSF NET ABSORPTION 9.8 MSF CONSTRUCTION COMPLETIONS 3.9 MSF VACANCY RATE 15.2% © 2013, CBRE, Inc. *Arrows indicate change from previous quarter. U.S. TECH SECTOR DOMINATES LARGE LEASE TRANSACTIONS EXECUTIVE SUMMARY • With a large demographic shift underway due to the aging of baby boomers, tech-savvy echo boomers will make up 33% of the workforce in seven years, further accentuating the generational differences in the workplace. • Nearly 90% of corporate real estate managers have instituted mobility programs in some form or another according to the latest New Ways of Working (NewWOW) survey, indicating that shifts in the workplace around mobility have clearly taken hold. • High-tech occupiers represented 13% of large lease deals in Q2 2013, the largest share of any industry sector. • The tech sector accounted for the lion’s share of large lease deals in Midtown South Manhattan, Seattle, Downtown San Francisco, San Francisco Peninsula and Downtown Boston during the quarter. These tech-dominated markets continue to favor owners, with year-over-year rent increases ranging from 6.1% to 22.9%. • Despite sequestration, rents in suburban Washington, D.C. have continued to grow over the past year. The government sector was responsible for more than 70% of large lease transactions in Northern Virginia in Q2 2013.
Transcript of U.S. Office OccupierView
CBRE Global Research and Consulting
U.S. Office OccupierView Q2 2013
LEASE RATE$26.96 PSF
NET ABSORPTION 9.8 MSF
CONSTRUCTION COMPLETIONS3.9 MSF
VACANCY RATE15.2%
© 2013, CBRE, Inc.
*Arrows indicate change from previous quarter.
U.S. TECH SECTOR DOMINATES LARGE LEASE TRANSACTIONS
EXECUTIVE SUMMARY
•Withalargedemographicshiftunderwayduetotheagingofbabyboomers,tech-savvyechoboomerswillmakeup33%oftheworkforceinsevenyears,furtheraccentuatingthegenerationaldifferencesintheworkplace.
•Nearly90%ofcorporaterealestatemanagershaveinstitutedmobilityprogramsinsomeformoranotheraccordingtothelatestNewWaysofWorking(NewWOW)survey,indicatingthatshiftsintheworkplacearoundmobilityhaveclearlytakenhold.
•High-techoccupiersrepresented13%oflargeleasedealsinQ22013,thelargestshareofanyindustrysector.
•Thetechsectoraccountedforthelion’sshareoflargeleasedealsinMidtownSouthManhattan,Seattle,DowntownSanFrancisco,SanFranciscoPeninsulaandDowntownBostonduringthequarter.Thesetech-dominatedmarketscontinuetofavorowners,withyear-over-yearrentincreasesrangingfrom6.1%to22.9%.
•Despitesequestration,rentsinsuburbanWashington,D.C.havecontinuedtogrowoverthepastyear.Thegovernmentsectorwasresponsibleformorethan70%oflargeleasetransactionsinNorthernVirginiainQ22013.
U.S. O
ffice | O
ccup
ierView
Q2 2
013
2
OPERATINg ENVIRONMENT
AGING OF BABY BOOMERS LEADING TO CHANGES IN THE WORKFORCEWiththegrowingpresenceofechoboomers(thosebornbetween1982and2000)intheworkforce,amajordemographicshiftisunderwayintheU.S.thathasfar-reachingimplicationsforoccupiers.Echoboomers,alsoknownasGenerationY,arebecomingagreatershareoftheoveralllaborforce,growingfrom14%in2010toanestimated33%by2020asthenumberofbabyboomersintheworkplaceshrinks.(See“Figure1:ShrinkingShareofBabyBoomersintheLaborForce,2010-2020”).
Thereareselectgenerationaldifferencesbetweenthetwoagegroups,includingechoboomers’technologicalsavvy,greaterenvironmentalconsciousness,andtheirdesireforcollaboration,flexibility,mobilityandefficiency.1Echoboomers,likeGenerationX(thosegenerallybornbetween1965and1981)aheadofthem,aremoreinterestedinlivinginurbanareasnearwheretheywork.Thistrendisattractingmoreofthelaborforcetodowntownlocations.Asaresult,fewerechoboomersaredriving,placinggreaterimportanceonpublictransportationand24/7amenitiessuchasrestaurants,services,housingandnightlife.Forsuburbanlocations,shuttlestoworkandamenitiesintheworkplacearebecomingincreasinglyimportanttoattractandretainechoboomers.Theincreasingpresenceoftech-savvyworkersintheworkforceisalsocreatingincreaseddemandforaflexibleworkingenvironmentandchoicesastowhen,whereandhowworkisbestaccomplished.
Recognizingthesedemographicshifts,corporateoccupiersarecreatingwaystotakeadvantageoftheadoptionofmobilitytoolsintheworkplace,anacknowledgementthatworkisincreasingly“whatyoudo,notwhereyougo.”Morecorporaterealestatemanagersareimplementingorplanningworkplacestrategiessuchastheuseof“free-address”officesand“hoteling”reservationsystemsthatsupportsgreatermobilityintheworkplace.Companiesareincreasinglythinkingabout“we”spacesinsteadof“me”spaces,accordingtoChrisHoodofCBREWorkplaceStrategy.Hecitesthe2013NewWaysofWorking(NewWOW)survey,2whichindicatesthat82%ofcompaniessurveyedhavesometypeofunassignedspaceprogramunderway,comparedwith77%in2009.Approximately89%haveaprogramthatallowsforworkathome,downslightlyfrom90%in2009.Morethanone-third,or37%,wereusingnon-companylocations,suchasaclientsiteorathird-partyservicelikeLiquidSpaceorRegus.Thiscomparesto28%usingthird-partyservicesin2009.ClickhereformoreonCBREWorkplaceStrategy.
Assuch,corporateoccupiersarebecomingmoreefficientwiththeirspacerequirementsandareabletoreducetheaveragesquarefootperworker.(See“Figure2:EmployersareAimingtoReduceAverageOfficeSquareFeetPerWorker,2010-2017”).
Figure 1: Shrinking Share of Baby Boomers in the Labor Force, 2010-2020
2010
14%
33%25%
42%43%
43%
2020Baby Boomers + Older
Generation X
Echo Boomers + Younger
Source: Bureau of Labor Statistics, January 2012.
1 According to CBRE global Investors.2 New WOW survey of 120 companies representing 3 million people in mid-2013.
© 2013, CBRE, Inc.
U.S. O
ffice | O
ccup
ierView
Q2 2
013
3
HIGH-TECH COMPANIES GOBBLE UP SPACE InQ22013,occupiersinthehigh-techsectorleasedthemostofficesquarefootagebycategory,accordingtoCBREResearchdatabasedonthetop25leasetransactionsinmajormarketsacrosstheU.S.(See“Figure3:U.S.OfficeLeasingActivitybyIndustry,Q22013”).Thehigh-techcategory,accountingfor13%ofthequarter’sleasingactivity,includeshigh-techservicesandmanufacturingfirms,softwareandwebande-commercecompanies,amongothers.Elevenpercentofspaceleasednationwideduringthequarterwasbyfinancialservicesfirmssuchasbanks,mortgagecompanies,privateequityandsecuritiesfirms.Another11%wasleasedbybusinessservicescompaniessuchasthoseinrealestate,accountingandconsulting.Insurancecompaniescontinuedtoleasespaceatasteadypace,accountingfor9%ofmajorQ22013activity.Thegovernmentsectoraccountedforan8%sharedespiteautomaticfederalbudgetcutsduetosequestrationandlocalgovernmentcutbacks.Anotherstrongsourceofleasingactivitycamefrom“creativeindustries”suchasmediaandentertainment,advertisingandarchitecturalandengineeringfirms,whichcollectivelyaccountedfor7%ofallmajortransactions.Thecontinuedstronggrowthintheoilandgasindustryfueledleasingintheenergysector,whichaccountedfor7%ofquarterlyleasingactivity.
GOVERNMENT, BIO-TECH AND LEGAL LEASING STRONG IN THE EAST REGIONCertainindustriesstoodoutregionallywithintheU.S.duringthequarter.IntheEast,leasingbystate,localandfederalgovernmentagenciesaccountedfor83%ofallgovernmentsectoractivityduringthequarternationally—nosurprisegiventheconcentrationofthegovernmentsectorinNorthernVirginia,SuburbanMarylandandWashington,D.C.TheEasthasalsobecomeincreasinglyattractivetobio-tech(i.e.pharmaceuticalsandmedicaldevice)companies,representing63%ofalllifesciencessectorleasingacrossthecountry.Meanwhile,62%ofallleaseswithlegalfirmsacrosstheU.S.tookplaceintheEast.
HIGH-TECH LEASING STRONGEST IN THE WEST WHILE ENERGY DOMINATES IN THE SOUTHTheWestdominatedinthetechnologysector,logging44%ofalltechleasingactivityintheU.S.duringQ22013.ThisiscertainlyreflectiveoftheinnovationcentersofSanFranciscoandSiliconValley.TheconcentrationofenergycompaniesinHoustonand,toalesserextent,Dallas,contributedtoanastounding67%ofallenergysectorleasingintheU.S.intheSouthinQ22013.TheMidwestreflectedamorediversifiedeconomy,butitisworthnotingthat33%oftheregion’squarterlyleasingactivitywasbyoffice-space-usingretailoccupiers.
Figure 2: Employers are Aiming to Reduce Average Office Square Feet Per Worker, 2010-2017
Source: CoreNet global; 2012 survey of 465 North American global managers of corporate real estate.
225
176
151
0
50
100
150
200
250
2010 2012 2017(F)
Squa
re Fe
et pe
r Emp
loyee
COMPETITIVE LANDSCAPE
© 2013, CBRE, Inc.
U.S. O
ffice | O
ccup
ierView
Q2 2
013
4
PROFESSIONAL AND BUSINESS SERVICES JOBS ARE SOARINGGainsinprofessionalandbusinessservicesjobsareleadingtheU.S.market’srecovery.(See“Figure4:ProfessionalandBusinessServicesShareofOffice-UsingJobsIsSoaring”).Overthenextfiveyears,theshareofofficedemandfromprofessionalandbusinessservicesisexpectedtofaroutstripothersectors,accordingtoCBREEconometricAdvisors.Muchoftheservicesector’sgrowthoverthepastthreeyearshasbeenfueledbydemandforhigh-techservicesprofessionals,atrendthatweexpecttocontinue.
Businessconfidencesurveysareatornearrecentpeaks,astrongindicatorthattheU.S.economicrecoverywillbeacceleratingincomingquarters.3Unlikethelastthreeyears,wheneconomicindicatorsmovedsidewaysduringthe“summerswoon,”optimismintheprivatesectorinQ22013indicatedthattheU.S.economyisfinallypoisedforstrongergrowth.Alongwithstrongergrowth,however,comesfearsovertheFederalReserve’staperingofitsbond-buyingprogramor“quantitativeeasing.”The“tapertantrum”hascausedincreasedvolatilityinthestockmarket,withtheDowJonesIndustrialAverageandtheS&P500losingbetween3%and4.5%overthemonthofAugustalone.
Thehousingmarketisimproving,whichwillbeastrongdriverofgrowthfortheoveralleconomyoverthenextseveralyears.AccordingtoMoody’seconomy.com,thehousingrecoverywilladd3millionjobsthroughmid-decade,helpingtobringtheU.S.economybacktofullemployment.However,lingeringcreditrestraintbybanksandtheneedforagracefultaperingoftheFederalReserve’squantitativeeasingprogrammayweighontherecovery.
Figure 3: U.S. Office Leasing Activity by Industry, Q2 2013
Figure 4: Professional and Business Services Share of Office-Using Jobs is Soaring
Economicconditionscontinuetoimproveacrossmetropolitanareas,accordingtoMoody’sAnalyticsRegionalBusinessCycleindicator.Dallas/Ft.Worth,DenverandHoustonareinexpansionmode,whileAtlanta,Boston,Chicago,Washington,D.C.,LosAngeles,NewYork,Philadelphia,SeattleandSanFranciscoarestillrecovering.
Technology
Business Services
Financial Services
Insurance
Government
Energy
Other*
Creative Industries
Legal
Health Care
Manufacturing/Transportation
Telecommunications
Life Sciences
Aerospace/Defense
Retail
13%
11%
11%
9%8%8%
7%
7%
6%
6%
4%3%
3%
2%
*Other category includes education, leisure, accommodations, non-energy-related mining, agriculture, art, food, non-profits, social services, religious organizations and natural resources.
Note: Includes top 25 transactions per market (ranged from 11,000 to 850,000 sq. ft. for Q2 2013). Source: CBRE Research, Q2 2013.
Source: CBRE Econometric Advisors, Q2 2013.
3 Moody’s Analytics Survey of Business Confidence, June 2013.
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
Finance Prof/Bus.Serv.
Office-Using Jobs by Sector (000’s)
© 2013, CBRE, Inc.
U.S. O
ffice | O
ccup
ierView
Q2 2
013
5
Figure 5: Which Industries Drove Demand for Large Deals in Q2 2013?
Note: Includes top 25 transactions per market (ranged from 11,000 to 850,000 sq. ft. for Q2 2013). Source: CBRE Research, Q2 2013.
TECH AND ENERGY MARKETS CONTINUE TO FAVOR OWNERSSeveralkeydowntownmarketsfavorownersatthispointinthecycle,makingleasenegotiationsmorechallengingforoccupiers(See“Figure6:Occupier’svs.Owner’sMarketMeter,Q22013”).TheyincludeHouston,Denver,MidtownSouthManhattan,SanFrancisco,Boston,DowntownManhattan,MidtownManhattanandSeattle.SuburbanmarketsthatfavorownersatthispointinthecycleincludeDallas/Ft.Worth,Houston,SanFrancisco,BostonandDenver.TheyareshowninFigure6ontheleftsideofthescale,rangingfromstronglyfavorabletoslightlyfavorableforowners,dependingonmarketconditions.
DowntownofficemarketsthatarestillrecoveringincludeChicago,Dallas/Ft.Worth,Atlanta,Washington,D.C.,LosAngelesandPhiladelphia,makingthemmorefavorabletooccupiersatthispointofthecycle.SuburbanofficemarketsthatarestillfavoringoccupiersincludeSeattle,Atlanta,Chicago,LosAngeles,SuburbanMaryland,NorthernVirginiaandPhiladelphia.ThemarketswhereCBREseesthemostopportunityforfavorablenegotiationsforoccupiersareshowninFigure6ontherightsideofthescale,rangingfromslightlyfavorabletostronglyfavorableforoccupiers.
TECH DEMAND RESULTS IN LARGE DEALS IN MIDTOWN SOUTH MANHATTAN AND SAN FRANCISCO
StrongtechsectorconcentrationsexistinkeyU.S.mar-ketsaccordingtoCBREResearch’sstudyofproprietaryleasingdataonthetop25transactionsineachofthelargestmarketsforQ22013.(See“Figure5:WhichIndustriesDroveDemandforLargeDealsinQ22013”).NewYorkCity’sMidtownSouthManhattanmarketisadominanthubfortechnologycompanies,whichrepre-sented70%ofmajorleasessignedinQ22013.Mean-while,SeattleoutpacedSanFranciscoPeninsulawiththegreatestconcentrationoflargeleasessignedbytechnol-ogycompanies.WithinSanFrancisco,Thesuburbanmarketsawagreaterconcentrationoflargeleasetrans-actionsamongcompaniesconcentratedinthehigh-techsector,at49%,thanDowntown,at39%,ashigh-techdemandshiftsitsfocustowardSanFrancisco’ssuburbs.
19%
22%
25%
28%
28%
32%
32%
36%
38%
39%
44%
49%
50%
62%
70%
72%
0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8
Philadelphia
Chicago
Los Angeles
Boston
Washington, D.C.
Manhattan, Midtown
Denver
Maryland Suburban
Atlanta
San Francisco
Dallas/Ft. Worth
San Francisco Peninsula
Seattle
Houston
Manhattan, Midtown South
Virginia Northern
Square Footage Share of Top 25 Deals in Market
GOVERNMENT
TECHNOLOGY
TECHNOLOGY
TECHNOLOGY
TECHNOLOGY
ENERGY
INSURANCE
TELECOM
BUSINESS SERVICES
FINANCIAL SERVICES
LEGAL
FINANCIAL SERVICES
FINANCIAL SERVICES
TECHNOLOGY
CREATIVE
BUSINESS SERVICES
© 2013, CBRE, Inc.
U.S. O
ffice | O
ccup
ierView
Q2 2
013
6
SPACE AND SIZE OPTIONS
Figure 6: Occupier’s vs. Owner’s Market Meter, Q2 2013
STRONG STRONGMODERATE MODERATESLIGHT SLIGHTSTSTSTSTSTRORORORORONGNGNGNGNG STSTSTSTSTRORORORORONGNGNGNGNGMOMOMOMOMODEDEDEDEDERARARARARATETETETETE MOMOMOMOMODEDEDEDEDERARARARARATETETETETESLSLSLSLSLIGIGIGIGIGHTHTHTHTHT SLSLSLSLSLIGIGIGIGIGHTHTHTHTHT
Houston
DenverManhattan, Midtown South
San Francisco
BostonManhattan, DowntownManhattan, Midtown
Seattle
ChicagoDallas/Ft. Worth
Seattle
AtlantaWashington, D.C.
Los AngelesPhiladelphia
Philadelphia Dallas/Ft. WorthHouston
San Francisco
BostonDenver
AtlantaChicago
Los AngelesMaryland Suburban*Virginia Northern*
OCCUPIER FAVORABLEOWNER FAVORABLEDO
WNTO
WN M
ARKE
TSSU
BURB
AN M
ARKE
TS
Market conditions where one or more of the following exist: negative netabsorption, flat or increasing vacancy rate, sluggish leasing activity, flat or declining rents, rent concessions or an imbalance created by a large increase in new supply.
Market conditions where one or more of the following exist: positive net absorption, stable or declining vacancy rate, strong leasing
activity, increasing rents, a lack of rent concessions or limited new supply.
*Washington, D.C. suburban markets. Source: CBRE Research, Q2 2013.
LARGE BLOCKS OF AVAILABLE SPACE AND NEW CONSTRUCTION PICK UP SLIGHTLY CBREResearchtracksthenumberspacesavailableforoccupiersover100,000sq.ft.inthelargestdowntownandsuburbanmarkets.Thenumberoflargeblocksofspaceavailabledowntownincreasedfrom214inQ12013to235inQ22013.ThisincludedtheadditionofseverallargeavailabilitiesinDowntownManhattan(See“Figure7:OfficeSpaceOptionsfortheLargestMarkets,Q22013”).
Demandforlargeblockswasstrongamonghigh-techandbio-techcompaniesinCambridge,withonlytwoblocksavailableinthesubmarketasoftheendofthequarter.TheWashington,D.C.,suburbanmarketssawadeclineinthenumberoflargeblocksofspaceduetotwonewlargeleasetransactionsfromthegovernmentandtechsectorsinNorthernVirginia.
Thenumberofofficepropertiesunderconstructionindowntownmarketsisincreasing,whichwillprovidemoreoptionsforoccupiersoverthecomingyears.Ofthelargestmarkets,suburbanHoustonhasthemostsquarefootageunderconstructionandbreakinggroundoverthenexttwoyears,providingadditionalspacetokeeppacewithdemandresultingfromgrowthintheenergysector.ThelackoflandfordevelopmentislimitingoptionsforoccupierslookingfornewspaceinCambridgeinsuburbanBoston,asnonewconstructionisunderwayorexpectedtobreakgroundinthenexttwoyears.
© 2013, CBRE, Inc.
U.S. O
ffice | O
ccup
ierView
Q2 2
013
7
Large Blocks (>100,000 sq. ft.) Construction
Number of AvailableLarge Blocks
Total Available in Large Blocks (Sq. Ft. x 000’s)
Currently Under Construction (Sq. Ft. x 000’s)
Breaking Ground in <2 Years (Sq. Ft. x 000’s)*
Downtown
Manhattan 75 17,813 7,500 3,400
Chicago 32 6,253 1,550 3,300
Washington, D.C. 30 6,994 2,660 1,179
Boston 20 3,186 2,300 2,005
Atlanta 17 4,400 550 1,500
Dallas/Ft. Worth 16 3,799 0 500
Los Angeles 11 2,365 0 0
Houston 9 1,226 0 900
Philadelphia 9 1,850 273 800
San Francisco 8 1,613 2,553 4,034
Seattle 6 1,689 331 865
Denver 2 683 363 830
Total - Downtown 235 51,871 18,080 19,313
Suburban
Washington, D.C.*** 84 14,852 3,943 2,664
Los Angeles 61 7,064 415 970
Dallas/Ft. Worth 55 10,593 1,737 3,925
Atlanta 38 5,421 0 1,500
Houston 28 3,139 7,692 4,724
Boston 27 4,560 1,000 0
Chicago 27 4,080 0 0
Denver 22 2,604 563 1,500
Philadelphia 18 3,074 272 600
Seattle 16 2,542 190 958
San Francisco 11 1,623 312 800
Cambridge** 2 334 0 0
Total - Suburban 389 59,886 16,124 17,641
*Estimates**Adjacent to Boston
***Includes Maryland Suburban and Virginia Northern Source: CBRE Research, Q2 2013.
Figure 7: Office Space Options for Largest Markets, Q2 2013
© 2013, CBRE, Inc.
U.S. O
ffice | O
ccup
ierView
Q2 2
013
8
Gross Average Direct Asking Rents
(US$/ Sq. Ft./Annum) Q2 2013
Y-o-Y Percent Change
12-month Outlook for Gross Average
Direct Asking Rents
Downtown
Manhattan, Midtown South 64.43 22.9 p
Manhattan, Downtown 48.18 19.3 p
San Francisco 52.02 18.2 p
Denver 29.15 11.9 p
Manhattan, Midtown 71.98 7.0 p
Boston 44.40 6.1 p
Seattle 32.93 6.1 p
Chicago 33.13 2.4 p
Atlanta 22.30 0.5 p
Houston 34.39 4.6 =
Los Angeles 34.44 2.3 =
Philadelphia 25.91 0.1 =
Washington, D.C. 52.38 -0.3 =
Dallas/Ft. Worth 19.12 -0.4 =
Suburban
San Francisco 50.33 8.1 p
Denver 19.47 7.0 p
Seattle 27.25 3.9 p
Dallas/Ft. Worth 19.44 2.9 p
Houston 21.36 1.5 p
Los Angeles 30.00 1.1 p
Cambridge* 42.77 0.9 p
Atlanta 18.77 0.4 p
Boston 19.64 -1.3 p
Maryland Suburban** 28.81 9.0 =
Virginia Northern** 32.28 2.1 =
Chicago 20.99 0.2 =
Philadelphia 24.52 -0.2 =
Figure 8: Office Rent Outlook for Largest Markets, Q2 2013
*Within Boston metro **Washington, D.C. suburban markets
Source: CBRE Research, Q2 2013.
TECH AND ENERGY OCCUPIERS FACE CONTINUED RENT INCREASES Occupierscanexpecttoseerentincreasesinnineofthelargestdowntownmarketsoverthenextyear,withmarketsexhibitingahighconcentrationofhigh-techandenergyusersleadingthelist.(See“Figure8:OfficeRentOutlookforLargestMarkets,Q22013”).
Notablerentincreasesoverthepast12monthsincludeDowntownSeattle,whererentshavegrown6.1%onayear-over-yearbasis.SuburbanSanFranciscorentsalsoshowedanuptick,up8.1%fromitsyear-agolevelamidstrongerdemandfromtechcompanies.Meanwhile,rentsdropped0.3%year-over-yearinDowntownWashington,D.C.,asoccupiersevaluatedworkplacestrategiesandrealestatecosts.
OCCUPANCY ECONOMICS
© 2013, CBRE, Inc.
U.S. O
ffice | O
ccup
ierView
Q2 2
013
9
Figure 9: Most Expensive Office Rents for Largest Markets, Q2 2013
Downtown Suburban
$0 $10 $20 $30 $40 $50 $60 $70 $80
Atlanta Dallas/Ft. Worth Dallas/Ft. Worth
Denver Boston
Chicago Houston Atlanta
Philadelphia Philadelphia
Seattle Maryland Suburban**
Denver Los Angeles
Virginia Northern** Seattle
Chicago Houston
Los Angeles Cambridge*
Boston Manhattan, Downtown
San Francisco San Francisco
Washington, D.C. Manhattan, Midtown South
Manhattan, Midtown
Figure 10: Key Office Market Indicators, Q2 2013
Gross Average Direct Asking Rents (US$/ Sq. Ft./Annum),
Q2 2013
Gross Average Direct Asking Rents Q-o-Q
Percent Change
Gross Average Direct Asking Rents Y-o-Y
Percent ChangeVacancy Rate (%),
Q2 2013
Atlanta Downtown 22.30 0.0 0.5 22.0
Suburban 18.77 0.0 0.4 21.6
Baltimore Downtown 21.74 -0.2 1.4 16.4
Suburban 22.79 3.1 5.0 16.6
Boston Downtown 44.40 1.2 6.1 8.1
Suburban 19.64 -0.6 -1.3 15.7
Cambridge 42.77 0.5 0.9 5.9
Chicago Downtown 33.13 0.2 2.4 14.9
Suburban 20.99 0.1 0.2 21.2
Dallas/Ft. Worth Downtown 19.12 0.3 -0.4 29.2
Suburban 19.44 0.9 2.9 17.7
Denver Downtown 29.15 3.0 11.9 11.8
Suburban 19.47 2.5 7.0 14.9
Detroit Downtown 18.14 -2.6 -3.4 22.2
Suburban 16.52 -1.6 -3.7 25.8
Houston Downtown 34.39 0.0 4.6 8.8
Suburban 21.36 1.2 1.5 13.0
continuedonnextpage...
*Within Boston metro **Washington, D.C. suburban markets. Source: CBRE Research, Q2 2013.
© 2013, CBRE, Inc.
U.S. O
ffice | O
ccup
ierView
Q2 2
013
10
Figure 10: Key Office Market Indicators, Q2 2013 (continued)
Source: CBRE Research, Q2 2013.
Gross Average Direct Asking Rents (US$/ Sq. Ft./Annum),
Q2 2013
Gross Average Direct Asking Rents Q-o-Q
Percent Change
Gross Average Direct Asking Rents Y-o-Y
Percent ChangeVacancy Rate (%),
Q2 2013
Kansas City Downtown 15.69 0.0 0.1 23.2
Suburban 16.82 -0.2 -1.6 16.3
Los Angeles Downtown 34.44 0.0 2.3 18.9
Suburban 30.00 -0.4 1.1 16.1
Manhattan Downtown 48.18 0.5 19.3 6.5
Midtown 71.98 -0.1 7.0 8.4
Midtown South 64.43 3.8 22.9 5.6
Minneapolis/St. Paul Downtown 23.63 -3.0 -1.0 18.5
Suburban 22.67 -0.1 0.9 17.1
New Jersey Suburban 24.55 -0.6 -0.8 16.9
Orange County Suburban 23.04 0.5 0.0 12.3
Philadelphia Downtown 25.91 0.4 0.1 15.3
Suburban 24.52 -0.2 -0.2 21.9
Phoenix Downtown 20.30 -1.1 0.0 24.0
Suburban 20.36 0.3 -0.4 23.8
Pittsburgh Downtown 20.22 5.3 0.0 10.3
Suburban 17.25 8.1 0.2 10.3
Sacramento Downtown 25.44 -0.9 -3.6 17.6
Suburban 18.84 -0.6 -3.1 21.9
San Diego Downtown 25.92 -0.5 0.0 16.5
Suburban 26.52 0.4 5.7 13.6
San Francisco Downtown 52.02 2.4 18.2 8.5
Suburban 50.33 3.9 8.1 10.7
San Jose Downtown 27.14 2.2 13.9 22.8
Suburban 34.43 2.2 14.0 10.3
Seattle Downtown 32.93 -0.4 6.1 14.6
Suburban 27.25 1.8 3.9 16.8
St. Louis Downtown 15.16 0.7 1.7 27.0
Suburban 19.65 -1.3 0.5 13.2
Tampa Downtown 21.14 -0.8 -0.6 15.6
Suburban 19.02 0.0 -2.0 17.3
Washington, D.C. Downtown 52.38 -4.1 -0.3 10.2
Maryland Suburban 28.81 0.0 9.0 16.9
Virginia Northern 32.28 1.0 2.1 16.1
© 2013, CBRE, Inc.
U.S. O
ffice | O
ccup
ierView
Q2 2
013
11
CONTACTSFor more information about this U.S. Office OccupierView, please contact:
Whitley Collins ExecutiveManagingDirectorOccupierServices,AmericasBrokerageLeadert: +19495092111e: [email protected]
Karen Ellzey ExecutiveManagingDirectorConsultingGlobalCorporateServicest: +16178696154e: [email protected]
Darcy Mackay ExecutiveManagingDirectorGlobalCorporateServicest: +14157720249e: [email protected]
Brook Scott InterimHeadofResearch,AmericasHeadofOccupierResearch,AmericasGlobalResearchandConsultingt: +14157720337e: [email protected]
Andrea Walker DirectorHeadofAmericasResearchPublicationsandDataGlobalResearchandConsultingt: +19193768608e: [email protected]
GLObAL RESEARCH AND CONSULTING ThisreportwaspreparedbytheCBREU.S.ResearchTeamwhichformspartofCBREGlobalResearchandConsulting–anetworkofpreeminentresearchersandconsultantswhocollaboratetoproviderealestatemarketresearch,econometricforecastingandconsultingsolutionstorealestateinvestorsandoccupiersaroundtheglobe.AdditionalU.S.researchproducedbyGlobalResearchandConsultingcanbefoundatwww.cbre.us/research.
DISCLAIMER
Informationcontainedherein,includingprojections,hasbeenobtainedfromsourcesbelievedtobereliable.Whilewedonotdoubtitsaccuracy,we
havenotverifieditandmakenoguarantee,warrantyorrepresentationaboutit.Itisyourresponsibilitytoconfirmindependentlyitsaccuracyand
completeness.ThisinformationispresentedexclusivelyforusebyCBREclientsandprofessionalsandallrightstothematerialarereservedandcannotbe
reproducedwithoutpriorwrittenpermissionoftheCBREGlobalChiefEconomist.
FOLLOW CbRE
© 2013, CBRE, Inc.
