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JLL’s Most Expensive Streets report reveals where office tenants pay top dollar
Phoenix, Dec. 3, 2017 –Just how much will companies pay to occupy one of America's most desired office addresses? According to JLL's 2017 Most Expensive Streets study, which looks at priciest U.S. office space, those high-profile strips command an average asking rent of $48.65 per square foot, a 46.9-percent premium compared to the rest of the country. In Phoenix, Camelback Road (within the Camelback Corridor submarket) commands an average asking rent of $36.65, a 44.9-percent premium compared to the rest of the market.
Location, location, location
While traditional drivers like the financial, real estate and consulting industries continue to make their presence felt on popular streets throughout the U.S., tech is having an outsized effect. In fact, five of the top 10 streets in the national ranking are tech hubs.
In Phoenix, the Camelback Corridor has only recently started to attract tech companies. Zenreach has established a home here in the Biltmore Center. Flexible office space operator, Workuity, also opened operations in the building. But, it's the quality Class A office space and growing area amenities that seem to continue to attract traditional companies to Camelback Corridor. And these qualities continue to attract investors too.
"This area is the most prestigious office submarket in Phoenix and where institutional owners invest," said JLL Senior Managing Director Dennis Desmond. "Investors have spent more than $962 million to acquire 4.1 million square feet of prime Corridor office product in the past 36 months."
The tech effect on other roads
Tech companies may not be making a huge impact on Camelback Road, but they are making impacts in other submarkets throughout Phoenix. The next top four most expensive streets in the Valley after Camelback Road are:
All of these streets are attracting technology companies like crazy as these office users seek easy access to the Millennial workforce and want to be in the live, work, play environments Millennials desire.
"As tech companies continue to move to Phoenix from the larger tech hubs, even the highest asking rates in our market don't seem so expensive from the outside looking in," said Kiana Cox, Senior Research Analyst for JLL. "Compared to markets like San Francisco, where some owners are achieving rents north of $150 per square foot, tech tenants are only paying $37-$45 for the best space available in our market. Affordability is important, of course, but there is a bigger emphasis on location when it comes to recruiting, retention and culture."
Most Expensive Streets in the U.S.
Sand Hill Road, San Francisco: Home to some of the most prominent venture capital firms, Sand Hill Road is one of the Bay Area's most high-profile business addresses. Rents here average $119.38 per square foot, and have hit as high as $185.
Fifth Avenue, New York: Popular among hedge funds, investment banks and law firms, Fifth Avenue remains a New York landmark and one of the country's most glamorous addresses. Average rents achieved $116.04 per square foot, with top rents of $185 coming at a 157.9 percent premium compared to the rest of the market, helping propel Fifth Avenue up one place from the previous report.
Mission Street, San Francisco: Mission Street is home to a unique blend of prominent tech and financial services tenants, making it one of the best-recognized addresses in San Francisco. With an average asking rent of $93.68 per square foot, Mission Street boosted its ranking by two spots since 2015.
Main Street, Boston: Main Street is at the heart of Kendall Square in Cambridge and a hub for the top life sciences and tech companies globally. An address here comes with average rents of $90 per square foot, a list-topping 143.6 percent premium compared to Boston at large. Vacancy is also in the mid-single digits at a miniscule 5.3 percent.
Greenwich Avenue, Fairfield County: Housing a variety of hedge funds and financial services companies, Greenwich Avenue is also lined with upscale retailers and restaurants. Rents average $86.53 per square foot, with top rents coming in at $101, a whopping 177.4 percent premium compared to the rest of Fairfield County.
Pennsylvania Avenue, Washington, DC: Pennsylvania Avenue not only serves as the address of the White House, it's also home to a variety of prestigious law firms and lobbying organizations and offers some of the best views in Washington, DC. At $80 per square foot, sharing a street with the White House and the Capitol means paying a 95.1 percent premium compared to the rest of the market. The street maintained its ranking from 2015.
Ocean Avenue, Los Angeles: Ocean Avenue runs north to south along the Pacific Coast, offering stunning ocean views and easy access to the beach. But gaining access to the famed strip, where rents average $78.20 per square foot, is anything but easy: vacancy is just 7.1 percent.
Boylston Street, Boston: Boylston Street is the premier office market in Boston's CBD. The area attracts primarily financial and legal services firms. At $68.87 per square foot, Boylston Street was supplanted from its previous ranking at No. 7.
Royal Palm Way, West Palm Beach: With a concentration of high-net worth individuals living in the surrounding areas, Royal Palm Way is home to many financial institutions and wealth management companies. Staying put in the ninth spot on the list, Royal Palm Way averages $61.80 per square foot, a 96.1 percent premium compared to the rest of West Palm Beach.
Congress Avenue, Austin: Traditionally home to financial and state-government users, a wave of new office, multifamily and retail developments has transformed Congress Avenue into one of the market's most dynamic corridors. A newcomer to the list's top 10, Congress Avenue averages $55.20 per square foot and boasts a tiny 9.5 percent vacancy.
JLL Capital Markets is a full-service global provider of capital solutions for real estate investors and occupiers. The firm's in-depth local market and global investor knowledge delivers the best-in-class solutions for clients — whether a sale, financing, repositioning, advisory or recapitalization execution. In 2016 alone, JLL Capital Markets completed $145 billion in investment sale and debt and equity transactions globally. The firm's Capital Markets team comprises more than 2,000 specialists, operating all over the globe.
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JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. A Fortune 500 company, JLL helps real estate owners, occupiers and investors achieve their business ambitions. In 2016, JLL had revenue of $6.8 billion and fee revenue of $5.8 billion and, on behalf of clients, managed 4.4 billion square feet, or 409 million square meters, and completed sales acquisitions and finance transactions of approximately $145 billion. At the end of the third quarter of 2017, JLL had nearly 300 corporate offices, operations in over 80 countries and a global workforce of over 80,000. As of September 30, 2017, LaSalle Investment Management had $59.0 billion of real estate under asset management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit