Just how much will companies pay to occupy one of America’s most desired office addresses?
In our 2017 Most Expensive Streets study, we look at the 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. And they remain as popular as ever. Just 12.8 percent of the nation’s most expensive real estate is vacant – a full 250 basis points lower than the U.S. average.
While traditional drivers like the financial, law and consulting industries continue to make their presence felt on these streets – think Fifth and Greenwich Avenues – tech is having an outsized effect. In fact, five of the top 10 streets in the ranking are tech hubs:
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Adding to the surge in demand for these addresses is exceptional pre-leasing on new developments. For instance, the delivery of FMC Tower on 30th Street in Philadelphia has cemented University City as one of the most desirable office locations in the region's core. That street is now the most expensive in Philadelphia, a city in the midst of a tech, media, education and health expansion. Vacancy on 30th Street is just 7.1 percent and rents carry an 83.9 percent premium, a number that is sure to increase as the Schuykill Yards development matures.
Similarly, Penn Avenue in Pittsburgh, now the city's most expensive corridor, is benefitting from the presence of a major tech company anchoring the Bakery Square development. Rents on Penn Avenue carry a 72.1 percent premium over the rest of the city.
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Tech companies and creative firms are trading wood beams and exposed brick for city views and skyscrapers.
Changing nature of transactions and elevated barriers to coastal markets inhibiting office investment
Leasing activity hits highest level in more than 2 year.
Director, Office Research
Senior Research Analyst