$100 or more
$50 to $100
$25 to $50
less than $25N/A
New York-DowntownVictoriaVancouverCalgarySeattleBostonNew York-Midtown SouthNew York-MidtownMontrealChicagoDenverSan FranciscoAtlantaHouston
Average Class ANet Rents andCap Rates – June 2012
TOP 10 Oice mArKeTs wiTh The mOsT sPAceUNDer cONsTrUcTiON (sqUAre eeT)
Oce demand to remain stableOce demand to increaseOce demand to decrease
Oce Demand Outlook Arrows
GLOBAL 2013 OrecAsT:
Expect only modest improvement in North American ofce vacancy rates overthe next two years, with the exception o a ew strong ICEE markets.
Central and Eastern Europe are eeling the eects o economic stagnation.Greater certainty in the eurozone is still some ways away, although acontinued improvement in activity is expected by mid-2013.
Rents in UK regional markets should remain stable due to the lack o Grade Aspace. Most markets will reach a ‘tipping point’ by mid-2013 at which timeurther rental growth is expected.
The outlook or the Beijing ofce property market, especially in the Class Asector, should continue to be positive; with investment market in the ofceproperty sector to also remain strong.
> UNiTeD sTATes Oice DemAND DriVeN BY Tech, eNerGY
Intellectual Capital, Energy and Education (ICEE) markets continue to generate adisproportionate share o ofce absorption in the US, and nine o the 10 USmarkets with the highest Q2 absorption have strong ICEE industries, led byHouston, Oklahoma City and Boston. The average vacancy rate was 140 basispoints lower in ICEE-dominated markets.For the rst time in nearly ve years, in Q1 2012, the US ofce vacancy ratedropped below 15%. The rate continued to decline by 13 basis points to 14.29%in Q2. New supply is delivered to the market at approximately the same pace asthe trailing ve-quarter average. With 38.4 million square eet o new constructionstill underway, additions to supply will impede improvement in occupancy orrental rates over the next our to eight quarters.
Untd stat: 2013 Outlook
CBD ofce buildings are outperorming the suburbs as companies consolidateoperations into the central core o Metropolitan Service Areas (MSAs), and thistrend will continue in 2013. Large spaces are in stronger demand as a result othis consolidation. As in 2012, landlords will be able to increase rents or largespace users at lease renewal.Proessional and business service employment accounted or approximatelyone-third o the monthly job growth in 2012, averaging 150,000 per month.However, the ate o the ofce vacancy rate does not merely depend upon anincrease in ofce workers; new construction also plays a role in the calculation.As a result, the 2012 vacancy rate’s drop below 15% is not likely to be betteredby a 14% vacancy rate in 2013. Look or only modest improvement in ofcevacancy rates over the next two years.
> resOUrces sUPPOrTiNG cANADiAN DemAND, BOND rATesDriViNG iNVesTmeNT
Observers expect continued slow and steadyeconomic perormance, with no exceptional wins or losses on the radar orCanada. The divide between the east and west is rmly entrenched, with theenergy and mining sectors driving stronger results in Alberta, Saskatchewanand British Columbia. Ontario and Quebec will post more moderate growth, asthe economy in the United States gradually improves, exports gather speed andthe manuacturing sector recovers.
canada: 2013 Outlook
Economic growth will be impacted by a retraction o government stimulusspending and weakening consumer activity as household debt curtails retailsales growth. The undamentals o all major ofce markets continue to be verysolid, with the national vacancy rate under 6%. Demand or ofce space will bemuted in the east, while resource-oriented western markets continue to be hot.
As a result, should end with a steady perormance, with a urther pick-up in
Rents are US$/SF/YR.