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What trends shaped the U.S. Skyline in 2017?

Learn more about the performance factors that contributed to these trends



Tenants' flight-to-quality boosted net absorption in early 2017 to 8.3 m.s.f. Occupancy growth will likely slow over the coming quarters as tenants vacate older, less efficient buildings.

For Trophy assets, the vacancy rate is significantly lower at 10.0%, but is still higher than pre-recession levels, mainly because of how firms have changed the way they use their Skyline office space.




Development activity has fallen by 8.3% since the end of 2016 to 34.7 m.s.f. as major projects wrap up, and concerns of excess supply have begun to emerge.

The rate of advanced lease signings – called preleasing – has also declined to 44.0% as more recent groundbreakings have been built on spec or with little preleasing.




Skyline rents reached a record $44.55 per square foot, with Trophy space even higher at $57.84 per square foot.

Tightening conditions and new supply will boost rent growth to an annual rate of 4.9%, nearly double that of 2016.




Skyline sales volume increased 4.4%, reaching $29 billion in 2016, contrary to the broader market, which declined 9.8% year-over-year.

Trophy acquisitions were up $7.2 billion year-over-year, signaling heightened demand for those lower rick investments.


U.S. Office Outlook

Office market fundamentals continue to shift into more balanced, neutral territory. New deliveries are providing a wider range of options for tenants and greater competition among landlords is pushing up concession packages, even as asking rents continue to climb.

U.S. Investment Outlook

Despite the length of this expansionary cycle, the U.S. economic outlook continues to be favorable. With the recent passing of the Tax Cuts and Jobs Act, GDP growth in 2018 is expected to exceed last year’s increases. This is sustaining strong fundamentals, notwithstanding that supply-side pressures remain elevated.