Office rental rates to spike
Since the rental rate peak in the office market eight years ago, rental rates for only nine of 43 U.S. Skyline markets have returned to, or surpassed, those pre-recession numbers, after adjusting for inflation (led by high-demand markets like Austin, Boston, and San Francisco). Rents for the remaining 34 are, on average, 12% lower than they were in 2007. However, these figures are expected to rise significantly, as expanding economies are fueling increased leasing demand, shifting negotiating leverage firmly to landlords. Limited development across the majority of markets, combined with aggressive capital transacting on even more aggressive underwriting, will likely fuel rent growth in the 18 to 20% range over the next 24 months across the U.S. Skyline.
- The gap between trophy and non-trophy rental rates for office space
- The most expensive Skylines and those offering the greatest value
- The average tenant improvement allowance across the Skyline markets
- Which Skyline cities are experiencing the largest rental rate growth
Visit JLL’s Digital Skyline today to learn more about these trends and more.
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Click to Tweet: Adjusted for #inflation, #tenantimprovement allowances have grown by just 4.7% in the past 10 years #JLLSkyline http://ctt.ec/Qz1CI