Here’s the top Major Metropolitan Markets in the US and their average rates for leasing Class A Office Space over the past year. (Note that these are for the Metro areas, not just downtown space.) No surprise that most of the usual suspects show up here, but there are also some surprises that popped up. Most of the markets are showing lower rates than a year ago, some considerably, but there are several markets that have shown growth and rising rates.
As you can see above, most of the major metros have falling rates for leasing office space, but there are a few notable exceptions. New York is still going strong and showing just over a 3% increase as the city rebounds. With more office space coming on the market in the next few years as the World Trade Center rebuilding continues, as well as difficulties for financial firms, look for this rate to stay steady or fall slightly as more space begins to open up.
Boston is also moving up once again as a high-tech corridor. With a less than 1% increase in average rates, there is some action happening here, but nothing incredibly substantial. We’ve seen more venture capital investment in Boston in recent years as well.
San Francisco shows the biggest jump with a 7.6% increase. Most of this increase can be attributed to the new tech boom that is following on the heels of web companies like Facebook, Twitter, Zynga, LinkedIn, Netflix and others. Additionally, the being in the same building as or next to Twitter or Facebook has helped to drive up average rates as well as companies are willing to pay more to be in close proximity to web company leaders.