JLL reveals most desired streets for U.S. office space in 2024

CHICAGO, Apr. 11, 2024 – In a study analyzing more than 50 U.S. markets, JLL’s Most Expensive Streets 2024 Report explores how U.S. prime office corridors have shown resilience amid a confluence of market headwinds, urban migration and supply constraints. At the same time, off-core, peripheral urban neighborhoods with robust dining and entertainment amenities have increasingly attracted high-end tenants looking for a vibrant atmosphere.

Among the top 25 most expensive streets, Sand Hill Road in Menlo Park, California, topped the list, with average full-service gross asking rents reaching $167.74 per square foot (psf), followed by 34^th Street in Hudson Yards, New York, with $162.43 psf, and Royal Palm Way in West Palm Beach, Florida, running at $134.31 psf.

Prime office corridors have been relatively immune to recent challenges in the commercial real estate market; JLL research shows that vacancy remains highly concentrated in inferior assets with 10% of buildings comprising 60% of national vacancy. As tenants seek trophy spaces and premier locations more than ever post-pandemic, the top 25 most expensive streets have a nearly 5% lower vacancy rate than the national average. They also saw positive absorption in 2023, while U.S. office market overall registered more than 50 million square feet of negative net absorption.

“U.S. office assets in prime corridors have shown resiliency over the past four years as companies recognize the value in high-quality offices, not just as a means to motivate return-to-office strategies, but also as a recruitment and retention tool,” said Jeff Eckert, President, Americas Agency Leasing at JLL. “The best buildings in the best locations will continue to shine.”

Interest in mixed-used environments, in particular, has flourished as cities continue their post-pandemic transformation and consumer habits evolve. Activity levels in those areas with a more diverse distribution of property types among commercial, residential and entertainment uses have recovered more quickly than commercially dominated cores.

“It’s not surprising to see emerging submarkets become more dominant, said Jacob Rowden, Research Manager, U.S. Office at JLL. “These neighborhoods outside the CBD tend to be in the middle of the action and offer tenants everything they’re looking for – from dining and shopping to entertainment amenities and fitness centers.”

The top five most expensive streets for U.S. office space:

1.    Sand Hill Road, Menlo Park, CA, $167.74 per square foot

The epicenter for the rapidly growing AI industry, Sand Hill Road is home to some of the most prestigious venture capital and private equity firms that have remained highly active this year, driven largely by funding for generative AI companies.

2.    34th Street, Hudson Yards, NYC, $162.43 per square foot

Marking the largest private development in the history of North America, Hudson Yards is shifting New York’s center of gravity toward mixed-use spaces, creating a city-within-a-city where consumers can live, work and play.

3.    Royal Palm Way, Palm Beach, FL, $134.31 per square foot

Asking rents on Royal Palm Way continue to be driven by the increased migration of financial services tenants from other gateway markets, chasing its limited supply of high-quality spaces.

4.    University Avenue, Palo Alto, CA, $109.04 per square foot

The main thoroughfare of downtown Palo Alto, University Avenue, offers immediate access to Stanford University and continues to be a high-demand location for start-up and technology companies like Amazon, Cisco and Meta as well as law firms such as Skadden, Ropes & Gray and Greenberg Traurig.

5.    Greenwich Avenue, Greenwich, CT, $105.00 per square foot

Greenwich Avenue is a historic district within one of the wealthiest counties in the country. Fairfield County's transition from the suburban mega campuses of the past toward downtown urban environments continues to attract financial firm tenants.

Across the more than 50 markets analyzed in the study, rents on the most expensive streets exceed the market average by 75%.

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