Top Office Markets Report March2023

U.S.
Research Report | March 2023
U.S. Office Markets:

Performance & Prospects
Office Services Occupier Services Research
Michael Lirtzman Scott Nelson Steig Seaward
Head of Office Agency Leasing | U.S. CEO, Occupier Services | Global Senior Director, National Research | U.S.
+1 312 612 5933 +1 470 386 9250 +1 303 779 5500
michael.lirtzman@colliers.com scott.nelson@colliers.com steig.seaward@colliers.com
Office Services Occupier Services Research

Kevin Morgan Chris Zlocki Stephen Newbold
President, Northwest Region Head of Client Experience Executive Vice Director, National Office Research | U.S.
& Head of Agency Leasing | U.S. President, Occupier Services | Global +1 202 534 3630
+1 775 823 6624 +1 313 595 5498 stephen.newbold@colliers.com
kevin.morgan@colliers.com chris.zlocki@colliers.com
2 Colliers U.S. Research Report

Table of Contents
Introduction . ........................................4 Fort Lauderdale...................................52 Orlando................................................96
Market Cycle Analysis ........................12 Grand Rapids.......................................54 Palm Beach..........................................98
Office Market Rankings......................13 Greenville-Spartanburg......................56 Philadelphia.......................................100
Economic Metrics . .............................14 Hartford...............................................58 Phoenix..............................................102
Albuquerque........................................16 Houston...............................................60 Pittsburgh..........................................104
Atlanta..................................................18 Indianapolis.........................................62 Portland.............................................106
Austin...................................................20 Jacksonville..........................................64 Raleigh................................................108
Baltimore.............................................22 Kansas City...........................................66 Reno-Sparks.......................................110
Birmingham.........................................24 Las Vegas.............................................68 Richmond...........................................112
Boise.....................................................26 Los Angeles..........................................70 Sacramento.......................................114
Boston..................................................28 Memphis..............................................72 Salt Lake City.....................................116
Charleston...........................................30 Miami....................................................74 San Diego...........................................118
Charlotte..............................................32 Milwaukee............................................76 San Francisco.....................................120
Chicago.................................................34 Minneapolis.........................................78 San Jose..............................................122
Cincinnati.............................................36 Nashville...............................................80 Seattle ...............................................124
Cleveland.............................................38 New Hampshire..................................82 St. Louis..............................................126
Columbia..............................................40 New Jersey...........................................84 Stockton.............................................128
Columbus.............................................42 New York..............................................86 Tampa................................................130
Dallas-Fort Worth................................44 Norfolk.................................................88 Washington, D.C................................132
Dayton..................................................46 Oakland................................................90 Methodology & Sources...................134
Denver..................................................48 Omaha..................................................92
Detroit..................................................50 Orange County....................................94
2023 Top Office Markets | Introduction 3

Introduction
As the economy is predicted to enter a mild recession near the third
quarter this year, 2023 will be a year of discovery for the U.S. office market,
navigating uncharted waters after three years of pandemic-induced market
adjustments. Along with emerging signs of stabilization are significant
debate and speculation about what lies ahead, as the return to the office
remains slow. The sector’s series of challenges could result in important
structural shifts in the years to come.
Is a market correction ahead? Firms continue to recast This report provides an overview of the national context
their property strategies, focusing on how much future and outlook, followed by an analysis of current economic
space will be needed and where it should be. Tenant and real estate trends in 59 prominent U.S. office
downsizing is increasing, with space reductions of at markets. We also assess the outlook for each market
least 20% to 30% by large occupiers. Uncertainty in the through year-end 2023 and determine their position
economy continues to cloud the picture, further impacting in the office cycle, evaluating whether local trends are
the timing of such decisions. Existing lease commitments declining, stabilizing, or exhibiting signs of recovery.
will also restrict the ability to implement change.

U.S. Office Market: Current Context
2022 closed in a downbeat fashion for the office market, As of the fourth quarter, the U.S. office vacancy rate sits at
with year-end numbers providing little encouragement. 15.7%, 30 basis points higher than in Q3 2022. Although
Net absorption turned negative in Q4 2022, vacancy rose, the rate is still below the peak of 16.3% during the Global
and sublease space hit a new record high. Financial Crisis, it is projected to reach that level by mid-
2023 if the current pace continues.
U.S. Office Market: Supply, Demand & Vacancy

U.S. Office Market: Supply, Demand & Vacancy
40 16
30
15
20
10 14
Millions SF
Vacancy %
0
13
-10
-20 12
-30
11
-40
-50 10
Q4 2018 Q2 2019 Q4 2019 Q2 2020 Q4 2020 Q2 2021 Q4 2021 Q2 2022 Q4 2022
Absorption (MSF) New Supply (MSF) Vacancy Rate (%)

Source: Colliers
In our national survey, 43% of the metro office markets

reported positive net absorption, down from 52% in “...national office absorption
the third quarter. However, national office absorption
totaled negative 14.1 million square feet in the fourth
totaled negative 14.1 million
quarter, wiping out the modest gains earlier in the square feet in the fourth
year and resulting in an annual net absorption total of
negative 8.6 million square feet. quarter, wiping out the
Reflecting this shift, 12 metro markets posted negative modest gains earlier in
absorption of more than 500,000 square feet.
Occupancy losses in the fourth quarter were led by the year and resulting in
New York City (negative 4.3 million square feet), an annual net absorption
Greater Los Angeles (negative 1.8 million square feet),
and Minneapolis (negative 1.5 million square feet). total of negative 8.6 million
Conversely, positive absorption was led by Baltimore,
Orlando, and Salt Lake City. square feet.”
2023 Top Office Markets | Overview 5

The U.S. office market now has a record 242.7 million during the previous cycle. As companies continue to
square feet of sublease space available, up from 232.8 assess real estate needs post-COVID, sublease space will
million square feet in Q3 2022 and considerably higher remain an attractive, short-term, cost-competitive option
than the peak of 143.3 million square feet in Q2 2009 until there is greater clarity on future business direction.
U.S. Office Market: Available Sublease Space

240
220
200
180
160
140
MSF
120
100
80
60
40
20
0
Q2 2008
Q4 2008
Q2 2009
Q4 2009
Q2 2010
Q4 2010
Q2 2011
Q4 2011
Q2 2012
Q4 2012
Q2 2013
Q4 2013
Q2 2014
Q4 2014
Q2 2015
Q4 2015
Q2 2016
Q4 2016
Q2 2017
Q4 2017
Q2 2018
Q4 2018
Q2 2019
Q4 2019
Q2 2020
Q4 2020
Q2 2021
Q4 2021
Q2 2022
Q4 2022
Source: Colliers / CoStar
Office construction is continuing to slow down, and the construction, with 15.3 million square feet, followed by
100.6 million square feet underway is 39% below the the San Francisco Bay Area, primarily focused on Silicon
peak of 164 million square feet in Q3 2020. The New York Valley, with 10.7 million square feet, and Seattle, with 7.6
metro area has the most significant amount of ongoing million square feet.
U.S. Office Market: Quarterly Under Construction Totals

180
160
140
120
MSF
100
80
60
40
20
0
Q2 2006
Q4 2006
Q2 2007
Q4 2007
Q2 2008
Q4 2008
Q2 2009
Q4 2009
Q2 2010
Q4 2010
Q2 2011
Q4 2011
Q2 2012
Q4 2012
Q2 2013
Q4 2013
Q2 2014
Q4 2014
Q2 2015
Q4 2015
Q2 2016
Q4 2016
Q2 2017
Q4 2017
Q2 2018
Q4 2018
Q2 2019
Q4 2019
Q2 2020
Q4 2020
Q2 2021
Q4 2021
Q2 2022
Q4 2022
Under Construction Historic Average
Source: Colliers
Although asking rates are relatively stable, the difference allowances of $100 or more per square foot and 12
between asking and effective rents is substantial due months of rent abatement in a new 10-year lease on
to generous concessions. For instance, in several major Class A space.
markets, tenants can receive tenant improvement

U.S. Office Market:
Key Observations for 2023
Top 10 Office Markets: • The U.S. office market remains

Sublease Availability Rates Q4 2022 relatively stagnant, but
structural changes are taking
San Francisco
shape.
Seattle
• Tenants are seeking new
Los Angeles
buildings with high-end
Boston amenities to attract and retain
Manhattan talent. But premium Class A
Average assets are in short supply.
Houston • Roughly 1.4 billion square
Dallas feet of leases expiring before
Atlanta 2026 could result in nearly 300
Chicago
million square feet of space
being returned to the market.
Washington D.C.
• Repositioning and adaptive
0% 2% 4% 6% 8% 10%
reuse opportunities, partly
Source: Colliers driven by ESG mandates, will
prove fruitful.
Top 10 Office Markets: • Capital is avoiding the office
Class A CBD Sublease Space – Rental Discount Q4 2022 market today but expected
lower interest rates in the
Houston
future will attract investment.
Chicago
Los Angeles
• Owners and investors must
navigate the changing
Manhattan
sources of market demand,
Atlanta
demographic trends,
Average and lower occupancy
Washington D.C. requirements. Meanwhile,
Seattle they should prepare to
Boston hold assets and deal with
San Francisco refinancings, capital, and
operational needs.
Dallas
0% 10% 20% 30% 40% 50%

Source: Colliers

U.S. National Office Forecast U.S. Economic Context and Outlook
• Vacancy: The U.S. vacancy rate is rising and is expected Current economic headlines remain dominated by overly
to surpass the prior cyclical peak over the year ahead. high but declining inflation and the Federal Reserve’s
Increased building obsolescence will result in greater (Fed) policy response. For example, February’s Consumer
structural vacancy. Price Inflation (CPI) — the principal measure used by
• Demand: Net absorption has been marginally positive the Bureau of Labor Statistics (BLS) — reached a 6%
in four of the past five quarters. A significant uptick annualized rate, down from the 40-year high of 9.1% in
looks unlikely because of business and economic June 2022 but still significantly elevated.
uncertainty. As the tech sector retrenches, leasing will CPI is expected to continue to fall. Oxford Economics
decline unless another tenant sector takes the lead. projects that CPI will be around 4.5% at the close of 2023.
• Sublease Space: Sublease space has reached a record This is still elevated compared to the 10-year average of
high and is expected to rise as more firms cut space 1.8% from 2011 to 2020.
and put the surplus on the market.
To curb inflation, the Fed has continued to raise interest
• Construction: Development, already down 40% from rates, by 50 basis points in December and 25 basis points
this cycle’s peak, will continue to fall due to a downturn in February. Additional 25- basis-point rate increases are
in pre-leasing and fundamentals that do not support expected at their March, May, and June meetings, raising
speculative projects. the terminal rate to 5.25%–5.50% by midyear.
• Rents: Asking rents are holding up, but with
generous concessions. The prevalence of lower-cost, However, the U.S. economy grew at a robust 2.9% annual
high-end sublease options will place further pressure pace in the fourth quarter of 2022. Still, the U.S. faces
on direct rates. tough odds of repeating its performance in 2023 as rising
interest rates sap growth and threaten to instigate a
recession. Oxford Economics projects real GDP growth of
just 0.1% in 2023, rising to 0.8% in 2024.
But the labor market remains remarkedly resilient,

adding 311,000 jobs in February 2023 and averaging over
“...the U.S. economy grew at 350,000 jobs over the last three months.
a robust 2.9% annual pace Over 80% of the markets tracked have eclipsed their
pre-pandemic office employment levels. Austin leads
in the fourth quarter of 2022. all markets at 23.7% growth, followed by Jacksonville,
Raleigh, and Dallas-Ft. Worth.
Still, the U.S. faces tough odds
of repeating its performance
in 2023 as rising interest rates
sap growth and threaten to
instigate a recession.”

Metro Office Employment - % Change from February 2020
Austin
Jacksonville
Raleigh
Dallas-Ft. Worth
New Hampshire
Nashville
Tampa
Atlanta
Charlotte
Seattle
Miami
Orlando
Fort Lauderdale
Boise
Denver
Palm Beach
Charleston
Indianapolis
San Diego
San Jose
Stockton
Phoenix
United States
Greenville-Spartanburg
Las Vegas
Houston
San Francisco
Boston
Detroit
Birmingham
Memphis
Philadelphia
Salt Lake City
Columbia
Portland
New Jersey
Los Angeles
Baltimore
Pittsburgh
New York
Chicago
Washington D.C.
Grand Rapids
Cincinnati
Sacramento
St. Louis
Orange County
Cleveland
Reno-Sparks
Minneapolis
Columbus
Richmond
Dayton
Hartford
Milwaukee
Oakland
Kansas City
Norfolk
Omaha
-5% 0% 5% 10% 15% 20% 25%
Source: Oxford Economics

West Coast markets dominate projected GDP growth for 2023, led by San Jose, at 2.6%. Los Angeles,
Sacramento, San Diego, San Francisco and Seattle are also in the top 10. Texas markets are projected to thrive
as well, with Houston and Austin coming in at Nos. 4 and 5, respectively, and Dallas-Ft. Worth at No. 13.
Projected Metro GDP Growth: 2023

San Jose
San Francisco
Seattle
Houston
Austin
Las Vegas
Los Angeles
Boston
San Diego
Sacramento
Orlando
Oakland
Dallas-Ft. Worth
New Hampshire
Denver
Miami
Portland
Raleigh
Jacksonville
Boise
Reno-Sparks
Orange County
Washington D.C.
Atlanta
Phoenix
Baltimore
Charlotte
New York
Minneapolis
United States
Stockton
Columbia
Tampa
Richmond
Nashville
Birmingham
Salt Lake City
Columbus
Fort Lauderdale
Philadelphia
Charleston
Pittsburgh
Grand Rapids
Omaha
Indianapolis
Memphis
Kansas City
Detroit
Palm Beach
Albuquerque
New Jersey
Milwaukee
Cincinnati
Chicago
Dayton
St. Louis
Cleveland
Norfolk
Hartford
-1.5% -1.0% -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0%
Source: Oxford Economics

Trends to Watch in 2023
• U.S. Slides into a Mild Recession: The Fed’s swift and 4.5%, and wage growth will drop closer to the Fed’s 2%
aggressive monetary policy, persistent inflation, and target range.
slower global demand will likely push the economy into • Consumer Spending Runs Out of Steam: As the
a mild recession by Q3 2023. Another 75 basis points pandemic-boosted household savings rate falls below
of rate hikes are in store for the remainder of 2023, pre-pandemic levels, households will likely curb
and the Fed won’t begin to reverse course despite spending, particularly on higher-priced goods, as the
moderating inflation until early 2024. labor market deteriorates and wage growth retreats.
• Inflation Poised to Drop Significantly: Easing • Residential and Business Investment Weaken:
supply chain challenges and falling energy, gas, and Despite stabilized 10-year Treasury and 30-year
commodity prices will relieve inflationary pressures. mortgage rates, single-family sales residential
Inflation can fall significantly because of lower rents investment will remain tepid. Easing pent-up
and housing costs, moderating healthcare costs, and demand, higher borrowing costs, and tightening
retailers unloading overstocked inventory. lending standards will reduce business investment as
• Labor Constraints Ease: Strong employment growth companies cut expenses in a contracting economy.
propelled the economy in 2022, but the labor market
will begin to stall in 2023, and job growth should turn
negative by summer. Although still low by historical
standards, the unemployment rate will rise above

Market Cycle Analysis
The Market Cycle Forecast analyzes occupancy will have begun, vacancy rates will decrease during this
movements and rental growth rates in 59 Metropolitan period, as new inventory is still under development and
Statistical Areas (MSAs). existing supply can no longer keep up with demand.
Starting in the Recovery Phase at the bottom left of the The market moves into the early stages of the Imbalance
cycle (see chart below), occupancy has reached its trough Phase once the supply of new developments overtakes
due to negative demand or oversupply of new office current demand. This key moment is often missed as
developments. Traditionally, the recovery phase begins the market appears extremely healthy. However, as the
when the development pipeline empties, and vacancy market moves deeper into the troubling stage of the
stabilizes. In the relief stage, excess space is absorbed, imbalance phase, supply begins to outpace demand
vacancy rates fall, and rental rates firm. As the market noticeably, vacancy rates rise, and rental rates moderate
progresses into the optimism stage of the recovery, before ultimately contracting.
landlords slowly begin to increase rates.
The Consolidation Phase begins when new supply
When the market reaches the Expansion Phase, demand continues to be delivered, experiencing little-to-no net
rises, and lease rates follow suit. As a result, markets tend absorption. As a result, rents decline further as the
to spend more time in the expansion phase than other vacancy rate rises. This market cycle phase ends when
phases during a complete real estate cycle. Construction development activity no longer exists, or demand begins
starts when lease rates have reached an equilibrium to outpace supply again.
justifying new development. Although new construction
Market Cycle | Year-end 2023 Forecast
key moment
ce den
ran i al
vib
t
en
Expansion Imbalance
co
em
nce
Rental value of supply and

growth slowing demand; Rental
e x cit
rn
value falling
Dallas-Fort Worth
Recovery Consolidation
m
optim
mis
Rental value Rental value

growth accelerating bottoming out Chicago, Houston, Minneapolis,
ssi
ism
Portland, San Francisco, Seattle

pe
Atlanta, Austin, Cincinnati, Cleveland,

rel ce Columbus, Dayton, Denver, Detroit,
ief eptan Hartford, Indianapolis, Kansas City,
acc Los Angeles, New Jersey, Orange
key moment County, Philadelphia, Richmond,
Fort Lauderdale, Miami, Palm Beach
St. Louis, Washington D.C.
Baltimore, Birmingham, Boston, Charlotte,

Albuquerque, Boise, Charleston, Columbia, Grand Rapids, Las Vegas,
Greenville-Spartanburg, Memphis, Milwaukee, New Hampshire,
Jacksonville, Nashville, Omaha, New York, Norfolk, Oakland, Orlando,
Raleigh, Salt Lake City, San Diego Phoenix, Pittsburgh, Reno, Sacramento,
San Jose, Stockton, Tampa, U.S.

Office Market Rankings
Based on the strength of the labor market and the GDP
resilience of the U.S. consumer, we anticipate that the By comparing GDP growth rates, we learn the size of the local
onset of the recession will be postponed until Q3 of economy and how it is performing. Real GDP growth is often
2023. According to Oxford Economics, in 95% of metros used as an indicator of the economy’s general health. The
GDP will decrease in Q2 and Q3, and 24 of the 59 higher the rate of growth, the stronger the local economy.
markets analyzed in this report will have negative GDP
growth in 2023. Tech markets and areas with significant Employment
tourism are expected to have the healthiest growth.
While job growth is essential to all sectors of the
At the same time, large manufacturing metros in the
economy, it is imperative to the office sector, as the
Midwest will face the most substantial GDP decline,
demand for office space is tied directly to job growth.
similar to that in 2022.
Spending
Despite the slowdown, Oxford Economics predicts that
metro employment growth in 2023 will surpass metro As strong spending figures point towards medium and
GDP growth by a wide margin. Metros such as San long-term confidence in the market’s overall health,
Francisco are still recuperating from their pandemic- consumer spending is a key economic barometer.
related job losses, and others poised to benefit from the
Population
ongoing robust spending on leisure and travel, such as
Las Vegas and Orlando, are leading in job growth. Substantial population gains are a positive indicator
of a metro area’s comparative advantages (quality of
While Pacific tech hubs are now facing challenges, they life, climate, recreation, and economic vitality). While
are expected to lead major metro GDP growth over employees have historically moved to where the jobs are,
the medium term, and Austin is expected to be at the in a transformational shift, employers are now moving to
forefront of job growth. the workforce.
In this report, we ranked each city on a scale of one to Home Prices

59 across five metrics to better determine those best
While home price appreciation is widely viewed as
positioned for a sustained recovery. The growth metrics
a positive indicator of an area’s desirability, years of
are as follows:
rampant growth raise concerns about affordability,
particularly for the East and West Coast markets.

2023 Economic Metrics
Top 59 U.S. Office Markets
GDP Growth Employment Growth Population Growth Spending Growth House Prices Growth
& Rank & Rank & Rank & Rank & Rank
Albuquerque -0.5% 49 0.6% 57 0.0% 48 0.2% 54 0.2% 21
Atlanta 0.3% 24 1.2% 38 1.2% 10 1.8% 9 0.2% 20
Austin 1.3% 5 2.6% 3 1.8% 2 2.4% 3 -0.8% 30
Baltimore 0.2% 26 1.5% 24 -0.1% 50 0.5% 48 -4.4% 50
Birmingham 0.0% 35 0.9% 49 0.3% 39 0.5% 49 3.9% 1
Boise 0.4% 20 1.2% 35 2.2% 1 1.7% 11 -4.0% 46
Boston 1.0% 8 1.3% 31 0.9% 22 1.9% 5 -2.7% 41
Charleston -0.2% 39 2.0% 8 0.7% 28 1.4% 20 0.1% 22
Charlotte 0.2% 27 2.4% 4 1.4% 6 1.9% 6 3.2% 2
Chicago -0.6% 54 0.6% 58 -0.2% 55 0.2% 55 -0.2% 25
Cincinnati -0.5% 53 1.3% 30 0.2% 44 0.8% 39 1.8% 11
Cleveland -0.7% 57 1.0% 47 -0.3% 58 0.2% 53 2.0% 8
Columbia 0.1% 31 1.6% 18 -0.1% 51 0.8% 38 3.2% 4
Columbus -0.2% 37 1.2% 40 0.8% 25 1.1% 30 1.5% 15
Dallas-Ft. Worth 0.7% 13 1.4% 27 1.3% 8 1.4% 21 -0.3% 26
Dayton -0.6% 55 0.8% 55 -0.3% 57 0.0% 58 1.0% 16
Denver 0.7% 15 1.2% 36 1.1% 14 1.6% 13 -2.9% 43
Detroit -0.4% 48 1.6% 21 0.0% 49 1.0% 31 -0.1% 24
Fort Lauderdale -0.2% 38 0.6% 56 0.5% 33 0.6% 46 -2.0% 37
Grand Rapids -0.3% 43 1.7% 16 0.5% 32 1.5% 14 1.9% 10
Greenville-Spartanburg -0.2% 40 1.0% 46 0.4% 38 0.9% 34 3.2% 3
Hartford -1.2% 59 1.2% 41 -0.4% 59 0.6% 44 -1.9% 35
Houston 1.4% 4 1.7% 15 1.5% 5 1.9% 8 1.5% 13
Indianapolis -0.3% 45 0.9% 50 0.4% 37 0.8% 40 2.3% 5
Jacksonville 0.4% 19 0.9% 51 1.1% 16 0.7% 43 -0.9% 32
Kansas City -0.4% 47 1.1% 45 0.5% 35 0.8% 37 0.6% 17
Las Vegas 1.2% 6 2.3% 5 0.7% 27 1.2% 28 -8.0% 57
Los Angeles 1.0% 7 1.7% 14 0.2% 43 1.2% 27 -3.1% 45
Memphis -0.4% 46 1.2% 37 0.1% 46 0.5% 47 1.5% 14
Miami 0.7% 16 2.0% 10 0.5% 34 0.4% 51 -2.5% 39

GDP Growth Employment Growth Population Growth Spending Growth House Prices Growth
& Rank & Rank & Rank & Rank & Rank
Milwaukee -0.5% 52 1.3% 29 -0.2% 54 0.3% 52 0.5% 18
Minneapolis 0.1% 29 1.5% 25 0.7% 30 1.9% 7 -1.7% 33
Nashville 0.0% 34 1.5% 22 1.1% 13 1.4% 18 2.0% 6
New Hampshire 0.7% 14 1.3% 33 0.2% 45 1.3% 26 -0.7% 29
New Jersey -0.5% 51 1.1% 43 0.3% 40 -0.2% 59 -1.9% 36
New York 0.1% 28 1.8% 13 1.1% 12 1.7% 12 -1.7% 34
Norfolk -0.8% 58 1.0% 48 -0.2% 52 0.1% 57 -0.3% 27
Oakland 0.8% 11 1.9% 11 0.8% 24 1.4% 19 -7.3% 56
Omaha -0.3% 44 0.8% 53 0.9% 21 0.9% 33 0.4% 19
Orange County 0.4% 21 1.4% 28 0.2% 42 1.4% 17 -3.0% 44
Orlando 0.8% 12 2.0% 9 1.6% 3 1.3% 24 0.0% 23
Palm Beach -0.5% 50 0.4% 59 1.1% 17 0.1% 56 -2.8% 42
Philadelphia -0.2% 41 1.3% 32 0.1% 47 0.7% 42 -0.9% 31
Phoenix 0.3% 25 1.8% 12 1.0% 19 1.4% 15 -7.0% 55
Pittsburgh -0.2% 42 1.6% 19 -0.2% 56 0.9% 36 1.7% 12
Portland 0.6% 17 2.1% 6 0.9% 20 1.7% 10 -4.1% 48
Raleigh 0.5% 18 1.6% 20 1.1% 18 1.3% 25 2.0% 7
Reno-Sparks 0.4% 22 1.2% 34 1.3% 9 1.0% 32 -8.5% 58
Richmond 0.0% 32 1.6% 17 0.6% 31 1.2% 29 -0.6% 28
Sacramento 0.8% 10 1.2% 39 0.2% 41 0.9% 35 -6.2% 53
Salt Lake City -0.1% 36 0.8% 54 1.6% 4 1.4% 16 -2.2% 38
San Diego 0.9% 9 1.5% 23 0.5% 36 1.3% 22 -4.0% 47
San Francisco 2.1% 2 3.1% 1 1.1% 15 2.6% 2 -7.0% 54
San Jose 2.6% 1 2.8% 2 1.1% 11 2.6% 1 -5.0% 52
Seattle 1.8% 3 2.0% 7 1.4% 7 2.1% 4 -4.1% 49
St. Louis -0.7% 56 1.1% 44 -0.2% 53 0.4% 50 2.0% 9
Stockton 0.1% 30 0.9% 52 0.9% 23 0.7% 41 -8.7% 59
Tampa 0.0% 33 1.1% 42 0.8% 26 0.6% 45 -2.5% 40
Washington, D.C. 0.3% 23 1.4% 26 0.7% 29 1.3% 23 -4.8% 51

Albuquerque
New Mexico
4.6% 0.4% 60.2%

Workforce
Unemployment Projected 2023-2027 Workforce
Metrics
Rate office job growth participation rate
Market Overview Tenant Opportunities

• According to Oxford Economics, Albuquerque had • Lease rates have stabilized despite the fall in vacancy
economic growth of 1.8% in 2022, following 5.1% rates and are off their early pandemic peak.
growth in 2021, which helped the metro economy • Over the next five years, low home price appreciation
recover from the pandemic’s effects. However, could spur migration from more expensive markets.
between 2023 and 2027, Oxford Economics suggests
that its economy will grow at an average annual rate • Landlords are increasing the amenities offered, aiding
of 1%, a half percentage point lower than the U.S. tenants trying to return employees to the office.
average. Meanwhile, employment is predicted to grow
by 0.5% per year on average for the next five years, Tenant Challenges
following growth of 3.5% in 2022. Albuquerque’s • Tenants seeking discounted sublease space are seeing
population is anticipated to remain relatively constant limited opportunities hit the market.
over the next five years until 2027.
• Rising construction costs combined with tenants’
• Since peaking in early 2017 at 19.5%, the overall resistance to extend lease terms beyond five years
vacancy rate has followed a downward trajectory and and tightening cash flows for some landlords will force
stood at 12.6% at year-end. A flight-to-quality continues more tenants to pay coming out of pocket for build-out
to emerge as tenants compete for a limited supply of costs.
Class A space. Class A properties finished the year at
• Albuquerque’s tight labor market will continue to
12.2%, better than Class B’s 14%.
create challenges for HR teams to attract and retain
• Lease rates have retreated from their record level talent.
set in the early stages of the pandemic. Overall, Class
A lease rates ended the year at $22.34 per square
foot per year, with Uptown and North I-25 Corridor
commanding the highest rents.
• With no meaningful new construction over the last
decade-plus, building renovations will remain prevalent
for landlords seeking quality credit tenants.

Average Annual Growth and Rank Market Cycle | Year-end 2023 Forecast
2023 2023-2027
Growth & Rank Growth & Rank key moment
ce den
-0.5% 1.0% ran i al
GDP v ib
49 57
t
en
0.6% 0.5% Expansion Imbalance
co
em
nce
Employment Rental value of supply and
57 47 growth slowing demand; Rental
e x cit
rn
value falling
0.0% 0.1%
Population
48 49
m
optim
mis
growth accelerating bottoming out
0.2% 1.4%
ssi
ism
Spending
pe
54 46
rel ce
0.2% 0.3% ief eptan
House Prices acc
21 56 key moment
Office Metrics | Q4 2022
Total YTD Net Vacancy Availability Sublease Under Avg Class

Inventory Absorption Rate Rate Avail. Rate Construction A Rate
14,231,814 61,336 12.6% 13.3% 0.2% 0 $22.34
Year-end Year-end Year-end Year-end Year-end Year-end Year-end
2023 Forecast 2023 Forecast 2023 Forecast 2023 Forecast 2023 Forecast 2023 Forecast 2023 Forecast
Absorption, New Supply & Vacancy Average Class A FSG Rates

CBD Suburban
200,000 20%
18% $20.26 Direct $23.49 Direct
150,000
16% – Sublease – Sublease
100,000 14%
12%
50,000 10% Historical Metrics | Last 20 years
8%
0 Current High Low
6%
(50,000) 4% Vacancy Rate 12.6% 19.5% 12.6%

2% Qtr/Year it happened Q4 2022 Q1 2017 Q4 2022
(100,000) 0%
2018 2019 2020 2021 2022
Class A Lease Rates $22.34 $24.61 $19.52
Qtr/Year it happened Q4 2022 Q3 2020 Q2 2018
Net Absorption Deliveries Vacancy Rate
2023 Top Office Markets | Albuquerque 17

Atlanta
Georgia
2.9% 0.7% 66.2%

Workforce
Metrics
Market Overview • Lease rates will feel downward pressure as vacancy

rates rise and the supply of sublease space increases.
• In 2022, Atlanta experienced robust job growth of 5.8%,
Landlords will be aggressive with concessions for high-
surpassing the U.S. growth rate of 4.1%. Restaurants,
quality tenants.
technology, and healthcare services primarily drove the
employment surge. Looking ahead, Oxford Economics • For tenants with term flexibility, quality high-end
anticipates a job growth rate of 1.2% in 2023, followed sublease space, often fully furnished, will be available
by an average rate of 0.7% from 2024 to 2027, higher at deep discounts.
than the projected U.S. rate of 0.5%. • Over the next five years, Atlanta is projected to be
• Leasing bounced back notably in 2022, when net in the bottom 25% for home price appreciation,
absorption finished the year in positive territory, just making the metro area a strong draw for out-of-state
over 1.5 million square feet, for the first time since businesses seeking to relocate their employees.
2019. Class A properties accounted for 90% of the
overall absorption as new deliveries and a flight-to- Tenant Challenges
quality spurred leasing. • Tenants that signed short-term leases in 2020 will
• Although the overall vacancy rate ticked up 20 basis be pressed to finalize space decisions despite the
points during the year to 16.9%, Class A lease rates continued lack of clarity in return-to-the-office and
increased by 2.8%. However, as the year progressed, hybrid work strategies.
the pace of rate increases continued to slow, to a 1% • More tenants will likely be compelled to shoulder build-
rate decline in the fourth quarter. out expenses due to the combination of escalating
• Over three million square feet of new product was construction costs and some landlords’ constrained
delivered, most of which could be classified as “trophy.” cash flows.
Atlanta’s urban core received its fair share, with over • A lack of clarity about the future of hybrid and remote
half of all new space in Fourth Ward, Midtown Union, work will continue to challenge tenants analyzing their
One Phipps Plaza, and 14th and Spring. space needs.
Tenant Opportunities
• With 4.2 million square feet of product under
construction and a 21.6% Class A vacancy rate, tenants
seeking to upgrade will have ample space options.

2023 2023-2027
ce den
0.3% 1.7% ran i al
GDP v ib
24 19
t
en
co
em
nce
e x cit
rn
value falling
1.2% 1.2%
Population
10 11
m
optim
mis
1.8% 2.3%
ssi
ism
Spending
pe
9 13
rel ce
0.2% 1.2% ief eptan
House Prices acc
20 47 key moment

237,024,478 1,519,614 16.9% 21.4% 1.0% 4,192,938 $33.35

CBD Suburban
6,000,000
200,000 18%
20%
5,000,000
18%
16% $37.14 Direct $27.21 Direct
150,000
16%
14% $26.91 Sublease $22.38 Sublease
4,000,000 14%
100,000 12%
3,000,000 12%
10%
2,000,000 8%
8%
0 6% Current High Low
1,000,000 6%
4%
(50,000)0 4% Vacancy Rate 16.9% 17.5% 9.9%
2%
(1,000,000)
(100,000) 0%
2018
2018 2019
2019 2020
2020 2021
2021 2022 Class A Lease Rates $33.35 $33.37 $21.81
2023 Top Office Markets | Atlanta 19

Austin
Texas
3.0% 2.3% 71.2%

Workforce
Metrics

• No city in the country can match Austin’s office job • Ample sublease space available offers tenants a great
growth over the last few years. Since the start of the opportunity to lease shorter-term, move-in-ready
pandemic, Austin has had a 23.7% job growth rate, space at deep discounts.
easily outpacing second-place Jacksonville at 15.2% and • While larger blocks of space are difficult to find,
the national average of 4.3%. although not impossible, smaller tenants seeking
• Vacancy continued to rise in 2022, by 120 basis points between 1,000 – 10,000 square feet have abundant
from Q1 to Q4. Austin’s overall rate is 21.5%, the options.
highest in over 20 years. Suburban Class A vacancies • As landlords are more motivated, tenants can take
in 2022 were 19.7%, while those of Class A in the CBD advantage of concessions.
reached 20.5%.
• Net absorption turned negative in the second quarter Tenant Challenges
and remained there in 2022. After nearly 500,000
• Access to capital seems to be a driving factor in
square feet of positive absorption in the first quarter,
resistance to acquiring space, along with the hybrid
the market finished the year at negative 488,853.
work environment creating uncertainty.
• Although leasing continues to creep up, some
• There is an influx of interest in creative office space in
landlords offered generous concessions in free rent
south Austin, causing locational challenges for some
and tenant improvements. CBD Class A full-service
tenants. Although many seek creative concept spaces
rates ended at $68.50 per square foot for direct space
without high build-out costs, this product has a limited
and $50.22 for sublease. Clearly, sublease rates can
supply.
vary depending on the circumstances of availability.
Class A full-service rates in the suburbs for direct space • In line with locational challenges, many tenants want
are $55.77 and $44.79 for subleases. move-in ready space, but non-sublease space options
are hard to come by. Many spaces are either in shell
condition or old.

2023 2023-2027
ce den
1.3% 2.4% ran i al
GDP v ib
5 4
t
en
co
em
nce
e x cit
rn
value falling
1.8% 1.9%
Population
2 1
m
optim
mis
2.4% 3.2%
ssi
ism
Spending
pe
3 1
rel ce
-0.8% 2.6% ief eptan
House Prices acc
30 5 key moment

68,521,440 (671,555) 21.5% 24.8% 6.0% 5,612,000 $54.22

CBD Suburban
3,000,000
200,000 20%
2,500,000 18% $68.50 Direct $55.77 Direct
150,000
2,000,000 16%
$50.22 Sublease $44.79 Sublease
1,500,000 14%
100,000
1,000,000 12%
500,000
0 8%
0 Current High Low
(500,000) 6%
(1,000,000)
(50,000)
4% Vacancy Rate 12.6% 19.5% 12.6%
(1,500,000) 2% Qtr/Year it happened Q4 2022 Q1 2017 Q4 2022
(2,000,000)
(100,000) 0%
2018
2018 2019
2019 2020
2020 2021
2023 Top Office Markets | Austin 21

Baltimore
Maryland
4.2% 0.3% 66.9%

Workforce
Metrics

• The overall vacancy rate increased by 30 basis points • Tenants who understand and act on their space
in 2022 and is 200 basis points higher since the start needs can get very favorable deals in current market
of the pandemic. Class A space remained the largest conditions.
contributor to the rise and ended the year at 16.3%. • Class A sublet space in the market is being offered at
• After over a million square feet was given back in 2021, an average 20% discount in the CBD and 27% in the
the market attracted slight positive demand in 2022, suburban areas.
and net absorption for the year tallied 232,621 square • The market lacks great public transportation, but
feet, mostly occurring in the year’s second half. does have a well-educated workforce that draws from
• Rents have remained steady throughout 2022, several nearby universities.
increasing just $0.07 from the start.
• While Baltimore is projected to be in the top half of Tenant Challenges
our metro analysis for GDP and employment growth in • Although there is a nationwide flight to quality, high-
2022, which rank No. 26 and No. 24, respectively, those end space options are limited.
metrics are projected to fall to the lower half of the
• With a rising-interest-rate environment and shrinking
pack over the next five years.
cash flows, some owners struggle to borrow for tenant
improvement allowances.
• Public transportation that is less robust than in nearby
metro markets limits companies’ hiring.

2023 2023-2027
ce den
0.2% 1.4% ran i al
GDP v ib
26 36
t
en
co
em
nce
e x cit
rn
value falling
-0.1% 0.2%
Population
50 48
m
optim
mis
0.5% 1.3%
ssi
ism
Spending
pe
48 50
rel ce
-4.4% -0.3% ief eptan
House Prices acc
50 59 key moment

123,429,203 232,621 12.3% 14.1% 1.3% 918,447 $27.53

CBD Suburban
200,000
2,000,000 20%
14%
18% $27.09 Direct $28.18 Direct
1,500,000
150,000 12%
1,000,000 10%
14%
100,000
500,000 12%
8%
0 6%
8%
0 Current High Low
(500,000) 6%
4%
(50,000)
(1,000,000)
4%
2%
Vacancy Rate 12.3% 13.6% 9.8%
(1,500,000)
(100,000) 0%
2018
2018 2019
2019 2020
2020 2021
2023 Top Office Markets | Baltimore 23

Birmingham
Alabama
2.5% 0.3% 60.8%

Workforce
Metrics

• Oxford Economics projects that GDP will only increase • Rising vacancies enable a wide selection of spaces and
by 1.1% annually over the next five years, slower than size ranges in Class A and B buildings.
the projected average 1.5% annual growth for the U.S. • Tenant consolidations and over 650,000 square feet
Total employment growth is also anticipated to be of available sublet space have impacted Class A office
lower than the national average and will only increase space the most.
by 0.4% annually between 2023 and 2027.
• Rate-conscious tenants are looking to the CBD, as rents
• The metro’s office market relies on demand from local have increased less than suburban submarkets.
and regional firms to drive absorption, and they have
been slow to lease large blocks, leaving net absorption
Tenant Challenges
just over negative 30,000 square feet for the year.
• Although rents are cheaper downtown, parking is
• Leasing is still below average levels for the area as
expensive, if you can find it.
companies continue reassessing space needs after
adopting remote and hybrid work models. Vacancy • Some older office spaces are being demolished in
of 11.6% is a record high and well above the 8.8% in order to build multifamily, multi-use, retail, and
Q3 2018. entertainment venues, diminishing overall office
inventory.
• Cap rates for stabilized multitenant office buildings
remain in the low 8% range. • High construction costs are pushing some tenant
improvements beyond landlord allowances.

2023 2023-2027
ce den
0.0% 1.1% ran i al
GDP v ib
35 52
t
en
co
em
nce
e x cit
rn
value falling
0.3% 0.4%
Population
39 42
m
optim
mis
0.5% 1.5%
ssi
ism
Spending
pe
49 44
rel ce
3.9% 3.2% ief eptan
House Prices acc
1 1 key moment

57,600,000 (30,411) 11.6% 12.9% 0.9% 56,500 $22.98

CBD Suburban
400,000
200,000 14%
20%
18% $23.00 Direct $22.70 Direct
150,000 12%
300,000 16% $21.75 Sublease $18.10 Sublease
10%
14%
100,000
200,000 12%
8%
100,000 6%
8%
0 Current High Low
6%
4%
0
(50,000) 4%
2%
Vacancy Rate 11.6% 11.6% 8.8%
(100,000) 0%
2018 2019 2020 2021 2022
2023 Top Office Markets | Birmingham 25

Boise
Idaho
2.6% 1.1% 63.2%

Workforce
Metrics

• Positive net absorption, low vacancy, and steady asking • With high business interest in the area, job growth will
rates were the norms in 2022. With 187,582 square remain strong over the next five years, higher than
feet of absorption, new deliveries also pushed the the national average. Workforce increases are also
vacancy rate up to 4.7%. expected to continue, driven by the new Micron plant.
• At 2.6%, unemployment in the Boise metro is a full 100 • Despite steady increases, asking rates remain very
basis points below the national average of 3.5%. affordable by national standards.
• Micron has committed to a $15 billion investment in • As the supply-demand imbalance levels out, tenants
a plant in the Boise area over the next decade that is will benefit from rising tenant improvement allowances
expected to employ 2,000 people directly and bring offered.
17,000 jobs to the area.
• Idaho has been the fastest-growing state over the last Tenant Challenges
two years, and from 2014 to 2019, Boise’s population • With an unemployment rate at around 2.5%,
increased by 2.4% annually, to a total population of companies are challenged to find employees.
792,000. It’s anticipated that Boise’s population will
• The population growth rate has shown signs of
grow at an average 1.8% per year through 2027.
deceleration recently.
• In certain submarkets such as Meridian, competition
for space remains fierce, as rapid growth in the area
has attracted increased population and demand for
commercial and residential real estate.

2023 2023-2027
ce den
0.4% 1.8% ran i al
GDP v ib
20 12
t
en
co
em
nce
e x cit
rn
value falling
2.2% 1.8%
Population
1 2
m
optim
mis
1.7% 2.5%
ssi
ism
Spending
pe
11 5
rel ce
House Prices acc
46 6 key moment

33,268,498 187,582 4.7% 6.4% 11.2% 367,412 $22.71

CBD Suburban
200,000
1,200,000 20%
6%
18% $25.49 Direct $23.03 Direct
150,000
1,000,000 5%
100,000 14%
800,000 4%
12%
50,000
600,000 10%
3% Historical Metrics | Last 20 years
8%
0
400,000 2% Current High Low
6%
(50,000)
200,000
4%
1% Vacancy Rate 4.7% 13.2% 2.7%
(100,000)0 0%
0%
2018
2018 2019
2019 2020
2020 2021
2021 2022
2022 Class A Lease Rates $22.71 $24.18 $16.40
2023 Top Office Markets | Boise 27

Boston
Massachusetts
3.3% 0.6% 68.2%

Workforce
Metrics

• Availabilities in the city of Boston reached a record • Boston is a tenant’s market with a wide range of
high in Q4 2022. Fundamentals also weakened in leasing opportunities in Class B product.
Cambridge and the Suburbs, but availabilities in both • For companies avoiding long-term leases, a large
geographies are well below historic highs. Overall, amount of sublease space is available for potentially
more than 32 million square feet is available across the shorter terms.
metro.
• Many landlords are providing favorable TI allowances
• More than 24 million square feet of direct space and and concessions, making this a good time to relocate
7.8 million square feet of sublease space was available and upgrade space.
in Q4 2022. The most notable availability growth was in
Class B buildings within Boston’s urban core.
Tenant Challenges
• Commitments in underway and recently completed
• Rising interest rates and a volatile stock market have
office buildings are strong. In Boston, more than
placed some companies in a holding pattern on
four million square feet are underway or under
decision-making and growth potential.
major renovation. However, the supply pipeline in
Cambridge/Suburbs is relatively empty, as developers • The tight labor market makes it hard to attract
have favored life sciences projects. workers.
• Boston’s GDP is projected to reach 1% in 2023, at No. 8 • Employee expectations for working from home make
in all metros and well above the U.S. average of 0.1%. bringing workers back to the office challenging.

2023 2023-2027
ce den
1.0% 1.9% ran i al
GDP v ib
8 11
t
en
co
em
nce
e x cit
rn
value falling
0.9% 0.6%
Population
22 30
m
optim
mis
1.9% 2.0%
ssi
ism
Spending
pe
5 22
rel ce
House Prices acc
41 38 key moment

186,299,441 (2,499,524) - 13.0% 4.2% 3,576,152 $50.40

CBD Suburban
4,000,000
200,000 20%
18% $69.73 Direct $31.21 Direct
2,000,000
14%
100,000 0
12%
(2,000,000)
8%
(4,000,000)
0 Current High Low
6%
(6,000,000)
(50,000)
4% Vacancy Rate 17.2% 21.2% 12.9%
(8,000,000)
(100,000) 0%
2018
2018 2019
2019 2020
2020 2021
2023 Top Office Markets | Boston 29

Charleston
South Carolina
2.9% 1.4% 61.7%

Workforce
Metrics

• The market has drawn an influx of talent and • The growth of several submarkets means downtown
companies, resulting in healthy leasing as people buildings compete with each other and the entire
return to the office and companies grow. Rapid market. Tenants can therefore use better parking and
population growth has driven this, especially from rates off the peninsula (CBD) for more favorable terms,
college-educated adults of all ages. The region has especially if they’re prepared to leave office properties
also attracted substantial capital investment in the in the most heavily touristed portions of the CBD.
manufacturing and logistics sectors, driving demand in • Flexible work environments allow tenants to design a
the professional and business services sectors. space for their needs today and in the future.
• Landlords continue to push up rents for new Class • Space flexibility allows for longer lease terms, providing
A space, while existing spaces are following, raising more short-term cost benefits like lower starting rates
their rates as much as 15%–20% higher than just a and increased tenant improvement allowances.
few years ago.
• Build-out costs for Class A office space remain high and Tenant Challenges
are rising, a barrier to entry for shell-condition space.
• Rising build-out costs will continue to be a barrier to
Tenants may soon prioritize existing space needing
entry, especially for shell-condition space. Tenants may
fewer changes, if landlords give appropriate tenant
soon prioritize existing space needing fewer changes
improvement allowances.
with appropriate tenant improvement allowances.
• While GDP growth is projected to decline 0.2% and trail
• A lack of new developments on the horizon and a
the national average in 2023, over the next five years,
continued influx of businesses mean vacancies should
annual growth is projected at 1.8%, placing it No. 17 on
keep falling, creating a landlords’ market.
the list.
• High construction costs will continue to provide
challenges for new leases.

2023 2023-2027
ce den
-0.2% 1.8% ran i al
GDP v ib
39 17
t
en
co
em
nce
e x cit
rn
value falling
0.7% 0.9%
Population
28 19
m
optim
mis
1.4% 2.1%
ssi
ism
Spending
pe
20 18
rel ce
0.1% 0.5% ief eptan
House Prices acc
22 54 key moment

12,473,925 580,751 17.8% – 2.8% 553,000 $37.30

CBD Suburban
200,000
800,000 20%
25%
18% $37.30 Direct $31.00 Direct
600,000
150,000
16%
400,000 14%
100,000
200,000 12%
15%
0 10%
8%
0 Current High Low
(200,000) 6%
(50,000)
(400,000)
5%
4% Vacancy Rate 17.8% 19.9% 7.3%
(600,000)
(100,000) 0%
2018 2019 2020 2021 2022
Net
Net Absorption
Absorption Deliveries
Deliveries Vacancy
Vacancy Rate
Rate
2023 Top Office Markets | Charleston 31

Charlotte
North Carolina
3.5% 1.5% 65.7%

Workforce
Metrics

• Charlotte’s robust growth in 2022 was similar to that in • Charlotte has over two million square feet of sublease
many other regions in the Southern U.S. Its job growth space, a short-term solution for tenants undecided
rate of 4.7% surpassed the national average of 4.1% about office use.
last year, led by the restaurant, employment services, • Leasing concessions are at an all-time high for office
and finance and insurance sectors. Oxford Economics tenants. Those with more than 10,000 square feet
projects that Charlotte will maintain job growth of are getting $10–$12 per square foot per lease year in
2.4% in 2023 and an average rate of 1.0% from 2024 to tenant improvement allowances and roughly a month
2027, higher than the expected national rate of 0.5%. of free rent per lease year.
Furthermore, Charlotte’s net job change from Q1 2020
to Q4 2022 was 5.6%, significantly higher than the U.S. • Landlords are building more spec suites, providing
net growth rate of 1.1%. tenants with move-in-ready options that they can
leverage when renewing leases because they can
• The Charlotte CBD continues to suffer the effects of quickly pivot to a spec suite.
work from home (WFH), with vacancy up 46 basis
points from Q3 2022 to Q4 2022. However, despite the
Tenant Challenges
rise in vacancy and sublease space, Class A landlords
are still holding strong on asking rates, right around • Pricing for construction materials is still driving higher
$37 per square foot per year. tenant improvement costs, making it harder for
landlords to justify lower rents.
• Net absorption took a huge hit in Charlotte, -527,921
square feet. As leases continue to expire, more • Build-out time for office space has been extended due
and more tenants have also adopted a “wait and to a longer permitting process and material shortages.
see” mindset by letting their leases roll and having • Hesitancy to sign longer-term leases limits the number
employees work from home until they can decide how of concessions offered to office tenants.
to balance remote and office work.
• The Southend Submarket continues to be a bright spot
in an otherwise gloomy Charlotte office market. Strike
rates in new developments are approaching $50 per
square foot as tenants try to entice employees back to
work in higher-quality space.

2023 2023-2027
ce den
0.2% 1.8% ran i al
GDP v ib
27 18
t
en
co
em
nce
e x cit
rn
value falling
1.4% 1.4%
Population
6 5
m
optim
mis
1.9% 2.5%
ssi
ism
Spending
pe
6 6
rel ce
3.2% 2.2% ief eptan
House Prices acc
2 15 key moment

101,401,945 428,200 14.2% 18.0% 2.5% 3,515,694 $36.30

CBD Suburban
6,000,000
200,000 16%
20%
5,000,000 18%
14% $38.10 Direct $33.43 Direct
150,000
12%
4,000,000 14%
100,000 10%
3,000,000 12%
50,000 8%
2,000,000
8%
6%
0 Current High Low
1,000,000 6%
4%
(50,000) 0 4% Vacancy Rate 14.2% 15.0% 7.6%
2%
(1,000,000)
(100,000) 0%
0%
2018
2018 2019
2019 2020
2020 2021
2021 2022
Net Absorption
Net Absorption Deliveries
Deliveries Vacancy
Vacancy Rate
Rate
2023 Top Office Markets | Charlotte 33

Chicago
Illinois
4.5% 0.0% 65.3%

Workforce
Metrics

• In 2022, Chicago’s net out-migration of 45,200 • With CBD sublease availability at 4.3%, the highest on
residents resulted in a 0.5% decrease in its population. record for downtown Chicago, there is a flood of space
Oxford Economics projects that through 2027, a options for tenants seeking shorter leases with fully
net out-migration of 215,100 people will cause a built-out space.
population decline of 0.2% annually, while U.S. average • Lease rates in all asset classes will remain very
population growth is predicted to be 0.4% annually. competitive and enticing, as landlords of quality
• The office vacancy rate stands at 19.9%, the highest assets are highly motivated to be creative and
level in Chicago’s recorded history, as several accommodating in pricing.
prominent companies have relocated headquarters • Tenants able to sign short-term leases can gain better
out of Chicago. Unfortunately, the record won’t stand flexibility for the future.
for long, as vacancy is anticipated to increase further in
2023.
Tenant Challenges
• After nine consecutive quarters of negative net
• The high cost of construction may still deter any new
absorption, Chicago office tenants have vacated and
tenant who wants to build out existing space.
consolidated space, adding over 14 million square feet
of vacant office space to the CBD in three years. • With workers reluctant to return to the office full-time,
hybrid options mean that the downtown area is less
• Overall weighted average direct gross asking rents
populated, causing a slight increase in safety issues
stayed steady — increasing only marginally — to
and reducing dining and retail options.
$32.16 from $32.09 quarter-over-quarter. Landlords
are keen to provide significant concession packages • Under the added pressure of the current economy,
and allow TI allowances to be converted into more tenants still struggle to forecast space needs.
free rent. As a result, “effective rents” are lower
than statistics suggest. To stay competitive, in some
instances landlords are being creative with tenants’
financing.

2023 2023-2027
ce den
-0.6% 1.2% ran i al
GDP v ib
54 49
t
en
co
em
nce
e x cit
rn
value falling
-0.2% -0.2%
Population
55 58
m
optim
mis
0.2% 1.1%
ssi
ism
Spending
pe
55 57
rel ce
House Prices acc
25 40 key moment

320,472,905 (3,302,002) 19.9% 27.6% 4.3% 2,019,382 $39.85

CBD Suburban
200,000
6,000,000 20%
25%
18% $48.84 Direct $30.85 Direct
4,000,000
150,000 20%
2,000,000 14%
100,000
0 15%
12%
(2,000,000) 10%
8%
0 Current High Low
(4,000,000) 6%
(50,000)
(6,000,000)
5%
4% Vacancy Rate 19.9% 19.9% 12.9%
(8,000,000)
(100,000) 0%
2018
2018 2019
2019 2020
2020 2021
2023 Top Office Markets | Chicago 35

Cincinnati
Ohio
3.4% 0.5% 64.4%

Workforce
Metrics

• Cincinnati has faced economic difficulties competing • Vacancy rates steadily increased throughout 2022,
with other Midwest cities due to a reliance on providing tenants more space options and bargaining
manufacturing and a comparatively lower level of power.
economic diversity. In 2022, the city’s job growth of • With a low sublease availability rate of 1.6%, 60 basis
1.3% was significantly below the national rate of 4.1%. points lower year-over-year, tenants seeking to sublet
As of year-end, employment in Cincinnati remained space face little competition.
1.6% below its Q1 2020 level, and a full recovery is not
anticipated until Q3 2025. • Office-using sectors had a year-over-year increase of
300 employees.
• Large portions of space are being converted into
residential buildings, notably including the historic
Tenant Challenges
Carew Tower and the former Macy’s HQ. Those two
together equal nearly one million square feet of space • Office asking rates have been steadily increasing
being converted within the CBD. each year since 2018. Class A asking rents, $22.46 per
square foot in 2018, are now $23.56 per square foot.
• Net absorption finished at -441,619 square feet
in 2022, less than 2021’s annual net absorption of • Submarkets most favored by Class A tenants continue
-557,913 square feet. Annual net absorption finished to have low office vacancy rates. For example, I-75
higher than originally predicted, indicating a slowdown North’s Class A vacancy rate was 14.3% at the end of
in the effects of COVID-19 on the office market. 2021 but finished at 10% in 2022.
• Vacancy gradually increased throughout 2022 to finish • Oxford Economics projects minimal migration over
the year at 16.8%. Rents also grew to an average the next five years and an average annual population
market rate of $19.34, a $0.50 increase from Q1 2022. growth of 0.2% through 2027, below the predicted
national rate of 0.4%.

2023 2023-2027
ce den
-0.5% 1.3% ran i al
GDP v ib
53 44
t
en
co
em
nce
e x cit
rn
value falling
0.2% 0.2%
Population
44 45
m
optim
mis
0.8% 1.4%
ssi
ism
Spending
pe
39 45
rel ce
1.8% 1.8% ief eptan
House Prices acc
11 25 key moment

59,998,707 (441,619) 16.8% 18.4% 1.6% 103,000 $23.56

CBD Suburban
800,000
200,000 18%
20%
600,000 18%
16% $23.75 Direct $23.47 Direct
150,000
16%
400,000
100,000 14%
12%
200,000
12%
10%
0
8%
(200,000) 8%
6%
(400,000) 4%
(50,000) 4% Vacancy Rate 16.8% 21.7% 14.0%
(600,000) 2%
(800,000)
(100,000) 0%
2018 2019 2020 2021 2022
2023 Top Office Markets | Cincinnati 37

Cleveland
Ohio
5.1% 0.2% 61.2%

Workforce
Metrics

• Cleveland’s annual job growth rate of 3.1% trailed the • After multiple local leadership changes, downtown
U.S. average by one percentage point in 2022. Cleveland is rebuilding a strong core, and tenants have
• The Cleveland market’s vacancy has surged since the abundant inventory to choose from.
pandemic’s onset. At year-end 2019, vacancy was • With the rise in sublease space, some tenants will be
12.6% and has since increased 230 basis points to able to sublease new Class A space at a slight discount.
14.9% at year-end 2022. The market has struggled to More sublease space is expected to hit the market in
return to pre-pandemic activity, especially in the CBD. 2023.
• Net absorption was positive in the first half of the year • Unlike the industrial sector, where landlords are in
but turned negative in the last two quarters, due to control, the pendulum firmly favors the tenant in the
economic headwinds and rising sublease availability office sector, as landlords offer generous concessions.
from employers that adopted remote and hybrid work
models. Tenant Challenges
• Employers are paying a premium for space with • Most tenants with more than 20,000 square feet of
updated technologies and modern amenities, adding space continue to delay decisions and hesitate to
value to the office experience as the flight-to-quality commit to a five- or ten-year term.
trend continues. Newer, highly amenitized buildings
• Employees remain in firm control of their employers,
are attracting healthy leasing compared to older, dated
and many favor remote work.
office buildings.
• Employment is still 1.2% below the pre-pandemic
level, and Oxford Economics projects that Cleveland’s
job count will grow by 1% before stagnating over the
following few years.

2023 2023-2027
ce den
-0.7% 1.0% ran i al
GDP v ib
57 53
t
en
co
em
nce
e x cit
rn
value falling
-0.3% -0.2%
Population
58 59
m
optim
mis
0.2% 0.9%
ssi
ism
Spending
pe
53 58
rel ce
2.0% 2.1% ief eptan
House Prices acc
8 17 key moment

52,206,384 (44,193) 14.9% 17.7% 1.5% 2,750,669 $21.87

CBD Suburban
600,000
200,000 16%
20%
500,000 18%
14% $21.31 Direct $19.97 Direct
150,000
12%
300,000
100,000 14%
10%
200,000 12%
50,000 8%
100,000
8%
6%
0 Current High Low
6%
(100,000) 4%
(50,000) 4% Vacancy Rate 14.9% 15.5% 7.7%
(200,000) 2%
(300,000)
(100,000) 0%
2018 2019 2020 2021 2022
2023 Top Office Markets | Cleveland 39

Columbia
South Carolina
3.1% 0.4% 59.7%

Workforce
Metrics

• Economic growth in the region is faster than average • Smaller tenants have ample space options, even within
for the U.S. economy and appears to be accelerating Class A properties.
as a multiyear strategy to attract manufacturing • Very large tenants have several quality sublet spaces
pays dividends. The Southeast and South Carolina, available, if their footprints align with available spaces
in particular, have drawn several manufacturing as currently configured.
investments related to converting from combustion to
electric powered trains. • Total employment growth is expected to outperform
the national average over the next five years.
• The vacancy rate increased by 30 basis points during
2022, to 14.3%. While elevated from the record low
Tenant Challenges
of 9% in Q1 2020, today’s rate remains well below the
25% high-water mark in 2012. • High-quality Class A space options for tenants requiring
10,000 square feet or larger remain in short supply.
• Because of a strong flight-to-quality for Class A space
in the suburban and CBD market, Class A space is now • The cost to upfit space is the largest challenge facing
in short supply. There is limited leasing in the Class B tenants. Available vacant spaces are second- and
sector and virtually none in the Class C inventory. third-generation, requiring substantial investment to
modernize.
• Many large spaces are available directly and as sublets.
However, most are in Class B and C buildings, requiring • Few choices exist for a tenant wanting a Class A
substantial capital investment to make the space building.
attractive. Moreover, much of the sublet space is not
easily divisible, meaning only the largest tenants would
have an interest.

2023 2023-2027
ce den
0.1% 1.4% ran i al
GDP v ib
31 39
t
en
co
em
nce
e x cit
rn
value falling
-0.1% 0.3%
Population
51 44
m
optim
mis
0.8% 1.7%
ssi
ism
Spending
pe
38 38
rel ce
3.2% 1.4% ief eptan
House Prices acc
4 36 key moment

15,315,930 (65,900) 14.3% – 3.0% 0 $22.45

CBD Suburban
200,000 16%
20%
100,000 18%
14% $23.79 Direct $21.48 Direct
150,000
0 12%
100,000 14%
(100,000) 10%
12%
(200,000)
50,000 8%
(300,000) 8%
6%
0 Current High Low
6%
(400,000) 4%
(50,000) 4% Vacancy Rate 14.3% 25.0% 9.0%
(500,000) 2%
(600,000)
(100,000) 0%
2018 2019 2020 2021 2022
2023 Top Office Markets | Columbia 41

Columbus
Ohio
3.3% 0.5% 66.7%

Workforce
Metrics

• The Columbus metro area had one of the smallest • The supply of sublease space ballooned in the fourth
vacancy rate increases in 2022, just 30 basis points, to quarter, rising 55%, offering an ample supply of
13%, but since vacancies set a record low in Q4 2019, discounted space.
they have risen 420 basis points. • While Class A lease rates have risen locally and
• While net absorption remained negative at 228,726 nationally, Class B and C rents are declining, benefiting
square feet, it’s trending in the right direction after rate-conscious tenants.
posting -927,569 square feet and -717,942 square feet • Flight-to-quality trends continue as spaces within highly
in 2020 and 2021, respectively. amenitized, high-demand areas attract tremendous
• Intel announced that it would invest more than $20 interest. On the other hand, spaces difficult to lease
billion for two new semiconductor chip facilities in pre-pandemic continue to see headwinds.
New Albany, creating 3,000 direct jobs and 7,000
construction jobs over the build. It also will support Tenant Challenges
tens of thousands of additional long-term jobs across
• Heavy dependence upon downtown office locations
an ecosystem of suppliers and partners. To put the
poses challenges to office workers’ return.
investment into context, the $20 billion cost is more
than the total valuation of Licking County, according • The area will continue to see a talent exodus due to its
to Rick Platt, CEO of the Heath-Newark-Licking County high cost of living and the popularity of remote work.
Port Authority. • With a decline in projects underway and announced
projects, tenants seeking new highly amenitized space
will have limited options.

2023 2023-2027
ce den
-0.2% 1.5% ran i al
GDP v ib
37 33
t
en
co
em
nce
e x cit
rn
value falling
0.8% 0.9%
Population
25 20
m
optim
mis
1.1% 1.9%
ssi
ism
Spending
pe
30 24
rel ce
1.5% 1.8% ief eptan
House Prices acc
15 26 key moment

67,101,416 (228,726) 13.1% 18.3% 1.5% 787,625 $24.09

CBD Suburban
1,500,000
200,000 14%
20%
18% $21.46 Direct $17.79 Direct
1,000,000
150,000 12%
10%
14%
500,000
100,000
12%
8%
50,000 0 10% Historical Metrics | Last 20 years
6%
8%
(500,000)
0 Current High Low
6%
4%
(1,000,000)
(50,000) 4% Vacancy Rate 13.1% 13.1% 8.8%
2%
(1,500,000)
(100,000) 0%
2018
2018 2019
2019 2020
2020 2021
2023 Top Office Markets | Columbus 43

Dallas-Fort Worth
Texas
3.7% 1.2% 69.3%

Workforce
Metrics

• Office jobs in the greater Dallas-Ft. Worth area have • Spec suites remain popular, and many landlords are
grown at a blistering pace, rising 14.5% since the start offering turnkey spaces for appropriately sized tenants
of the pandemic and trailing only growth in Austin, that provide enough scale. Tenants can meet five-year
Jacksonville, and Raleigh during that time. terms without paying for their own improvements.
• Despite finishing the year on a down note of negative • Over the last five years, over 23 million square feet of
net absorption of 840,778 square feet in the fourth new space has been added, and with 6.4 million square
quarter, the market absorbed just over 1.8 million feet more underway, tenants seeking newer product
square feet for the year, indicating it is still very stable have options.
and resilient. • As the most well-capitalized companies upgrade to
• The vacancy rate ended the year at 19.7%, rising 30 trophy space to encourage workers to return to the
basis points during the quarter and pushing rates into office, that leaves a window for the next tier to backfill
historically high territory. Sublease space continued that vacated space with favorable terms.
to increase, ending the year at over 10 million square
feet, an increase of close to 100% since 2020. Tenant Challenges
• Class A lease rates reached a new high in Q4 2022 at • Strong landlord confidence in the metro area has
$34.62 per square foot for full service and helped pull spurred significant capital improvements in many
the overall asking rents to a new record of $30.44 per buildings. The resulting asking rates in these updated
square foot. buildings are causing sticker shock.
• Although the availability rate has reached 23.5%, rental
rates continue to rise for now.
• Companies reducing space have to plan for times when
more of the workforce is on site, which puts a strain on
parking and seating.

2023 2023-2027
ce den
0.7% 2.0% ran i al
GDP v ib
13 7
t
en
co
em
nce
e x cit
rn
value falling
1.3% 1.3%
Population
8 6
m
optim
mis
1.4% 2.4%
ssi
ism
Spending
pe
21 10
rel ce
House Prices acc
26 34 key moment

313,394,516 1,820,586 19.7% 23.5% 3.3% 6,409,103 $34.62
Absorption, New Supply & Vacancy Average Class A FSG Rates (Dallas area only)
CBD Suburban
200,000
8,000,000 20%
25%
18% $31.40 Direct $31.08 Direct
150,000
6,000,000 16%
100,000 14%
4,000,000
12%
15%
50,000
2,000,000 10% Historical Metrics | Last 20 years
8%
10%
00 Current High Low
6%
(50,000)
(2,000,000)
4%
5% Vacancy Rate 19.7% 19.8% 15.0%
(100,000)
(4,000,000) 0%
2018
2018 2019
2019 2020
2020 2021
2023 Top Office Markets | Dallas - Fort Worth 45

Dayton
Ohio
3.8% 0.0% 60.0%

Workforce
Metrics

• Office space around the Wright-Patterson Air • Lease rates are beginning to fall, albeit more slowly
Force Base is expected to attract increased leasing than tenants are expecting. At $18.46 per square
throughout 2023. However, the rest of Dayton faces foot, Class A CBD lease rates remain substantially
many of the same challenges as other office markets. discounted over suburban Class A properties, at $25.50
• Annual net absorption for 2022 finished at -308,998 per square foot.
square feet, a significant drop from 2021’s -1,237 • As in other markets, companies in Dayton have been
square feet. The CBD had the highest overall vacancy able to downsize space since the pandemic, leading to
rate at 30.9%. increased vacancy and more bargaining power for the
• Overall average asking rents ended the year at $16.83 tenant.
per square foot, a $0.18 drop from $17.01 per square • While the office market is experiencing a flight-to-
foot in Q4 2021. quality, plenty of Class A space remains, with direct
• Over the next five years, Oxford Economics anticipates vacancy at 23.8%.
a 1% annual increase in GDP, lower than the projected
1.5% annual growth rate for the U.S. during the same Tenant Challenges
period. Total employment growth is also expected to • Banks have become more risk-averse, making it more
be below the national average. difficult for tenants to secure financing for larger deals.
• The cost of new construction is rising, and only 83,000
square feet are under construction, of which 23,000
square feet is build-to-suit.
• Unlike other markets, Dayton does not have abundant
sublease space, with availability at 0.5% at year-end.

2023 2023-2027
ce den
-0.6% 1.0% ran i al
GDP v ib
55 56
t
en
co
em
nce
e x cit
rn
value falling
-0.3% -0.2%
Population
57 57
m
optim
mis
0.0% 0.8%
ssi
ism
Spending
pe
58 59
rel ce
1.0% 1.5% ief eptan
House Prices acc
16 35 key moment

14,884,575 (308,998) 22.2% 22.0% 0.5% 83,000 $20.24

CBD Suburban
700,000
200,000 25%
20%
600,000 18% $18.46 Direct $25.50 Direct
150,000
500,000 20%
16% – Sublease $21.75 Sublease
400,000
100,000 14%
300,000
15%
12%
200,000
100,000
10%
8%
0
0 Current High Low
(100,000) 6%
(200,000)
(50,000)
5%
4% Vacancy Rate 22.2% 24.7% 18.7%
(300,000) 2% Qtr/Year it happened Q4 2022 Q1 2014 Q3 2020
(400,000)
(100,000) 0%
2018 2019 2020 2021 2022
2023 Top Office Markets | Dayton 47

Denver
Colorado
3.7% 0.9% 71.8%

Workforce
Metrics

• The Denver metro’s office vacancy stood at 15.9% at • Sublease space available rose 300,000 square feet
year-end, and the Downtown market rate was the during Q4 2022, pushing the overall square footage
highest at 21.7%, 40 basis points less than the previous to 4.1 million. Of that, 1.5 million square feet is
quarter. downtown, and Class A space is offered at an average
• Net absorption returned to a positive figure in the 37% discount over direct space.
Denver metro, recording 21,056 square feet; after a • With a growing development pipeline that ended the
challenging Q3 2022, which realized -830,000 square year at 4.1 million square feet, tenants have ample
feet, YTD absorption numbers are still positive. For a high-quality space options.
struggling office market, there still is much promise for • High vacancy rates are causing landlords to offer
2023 and beyond. attractive concessions and a large array of options and
• Average direct full-service lease rates in Denver flexibility for tenants.
decreased slightly in Q4 2022, to $30.58 per square
foot from $30.60 per square foot in Q3. Class A rates Tenant Challenges
in the Southeast realized a $0.25 per square foot
• The return of office workers has proven to be
increase, to $29.82 per square foot, while Downtown
increasingly difficult because of hybrid models adapted
had a small decrease from $38.90 per square foot to
during the pandemic.
$38.37.
• As the cost of living increases, many well-educated
• Oxford Economics forecasts Denver will have job
employees will be forced to move to suburban areas.
growth of 1.2% in 2023 and an average job growth rate
of 0.9% in 2024 through 2027, above the forecasted • Despite efforts to bring back employees working from
U.S. rate of 0.5%. home, many large employers still find this challenging,
leading to increased flexibility in work arrangements.

2023 2023-2027
ce den
0.7% 1.9% ran i al
GDP v ib
15 9
t
en
co
em
nce
e x cit
rn
value falling
1.1% 1.0%
Population
14 15
m
optim
mis
1.6% 2.3%
ssi
ism
Spending
pe
13 12
rel ce
House Prices acc
43 45 key moment

171,217,134 (269,763) 15.9% 14.9% 2.3% 4,082,315 $29.98

CBD Suburban
5,000,000
200,000 18%
20%
4,000,000 18%
16% $39.12 Direct $30.93 Direct
150,000
3,000,000 16%
2,000,000
100,000 14%
12%
12%
1,000,000 10%
0 8%
8%
(1,000,000)
6%
(2,000,000) 4%
4% Vacancy Rate 15.9% 16.7% 10.1%
(50,000)
(4,000,000)
(100,000) 0%
2018
2018 2019
2019 2020
2020 2021
2023 Top Office Markets | Denver 49

Detroit
Michigan
4.5% 0.2% 61.1%

Workforce
Metrics

• Job growth in Detroit was robust in 2022, at a rate of • Sublease availability is at a 10-year high, a benefit for
4.3%, surpassing the U.S. growth rate of 4.1%. While tenants looking to sign short-term leases.
total employment remains 0.3% lower than pre- • Tenants are receiving higher than normal market
pandemic levels, a full recovery is anticipated in Q1 of concessions for signing long-term direct leases.
2023. But Oxford Economics projects that job growth
will average 0.3% through 2027, half the rate projected • Companies are downsizing existing footprints, allowing
for the U.S. during the same period. moves to more expensive properties while keeping
overall rent costs similar.
• Metro Detroit’s vacancy rate increased by 50 basis
points year-over-year to 12.9% but remained well
Tenant Challenges
below the 18.1% high set in 2010.
• Tenants who cannot receive increased tenant
• Net absorption turned positive during the first three
improvement allowances may be unable to update
quarters of the year but ended the year in the red
current space due to the high cost of construction and/
overall, at -1,269,565 square feet. The fourth quarter
or improvements.
negative net absorption of 1.3 million square feet was
the highest single-quarter net loss since Q1 2010. • Employers risk losing workers to other companies
if they perceive a lack of top-notch amenities and a
• Landlords held asking rates firm but continued to offer
welcoming atmosphere.
generous concessions in the form of free rent and
improvement allowances. The overall full-service rate • The market could have a talent exodus due to full-time
ended at $21.12 per square foot. remote work opportunities.

2023 2023-2027
ce den
-0.4% 1.0% ran i al
GDP v ib
48 54
t
en
co
em
nce
e x cit
rn
value falling
0.0% 0.0%
Population
49 51
m
optim
mis
1.0% 1.3%
ssi
ism
Spending
pe
31 49
rel ce
House Prices acc
24 9 key moment

193,024,258 (1,269,565) 12.9% 17.2% 1.4% 1,401,536 $22.44

CBD Suburban
6,000,000
200,000 18%
20%
18%
16% $28.79 Direct $22.39 Direct
5,000,000
150,000
16%
4,000,000 14%
100,000 12%
3,000,000 12%
10%
2,000,000 8%
8%
1,000,000 6%
4%
(50,000)0 4% Vacancy Rate 12.9% 18.1% 9.6%
2%
(1,000,000)
(100,000) 0%
2018
2018 2019
2019 2020
2020 2021
2023 Top Office Markets | Detroit 51

Fort Lauderdale
Florida
3.1% 0.4% 67.2%

Workforce
Metrics

• Rents climbed to an all-time high of $37.22 per square • Limited large tenants in the market compared to 2022
foot full-service, up 5.2% year-over-year, and $41.64 and 2021 will create more leverage for tenants of all
per square foot full-service for Class A, up 3.9% year- sizes.
over-year. • Interest-rate-environment/debt challenges are applying
• Net absorption trended positive in 2022, the first time pressure on some landlords, causing them to more
since pre-pandemic, reaching 469,655 square feet. This aggressively pursue good credit tenants in particular.
was driven primarily by new-to-market tenants and the • Potential exists for more abatement concessions, as
flight-to-quality, particularly at The Main, a new trophy some landlords need to preserve cash in the debt-
Class A building in Downtown Fort Lauderdale. constrained market.
• Uncertainty in the financial markets combined with
high investment volume earlier in the year led to Tenant Challenges
stalled trades in the second half of 2022. However, as
• Limited supply and, therefore, choices are causing
the financial markets unlock and capital is ready to be
some tenants to take space that is not necessarily
invested, Broward County will be an ideal market, with
“ideal” for their intended use.
favorable fundamentals.
• Some landlords’ financing pressures limit their ability
• After years of hovering towards the top quartile for
to provide necessary tenant improvement allowances
economic prosperity of metro areas featured in this
due to debt constraints.
report, Oxford Economics projects in 2023 and over the
next several years, Fort Lauderdale will land around • Lack of certainty about the future of remote/hybrid/
the mid-quartile. full workforce models, despite efforts to bring people
back to the office, creates challenges for tenants in
identifying the amount of space needed.

2023 2023-2027
ce den
-0.2% 1.6% ran i al
GDP v ib
38 26
t
en
co
em
nce
e x cit
rn
value falling
0.5% 0.6%
Population
33 34
m
optim
mis
0.6% 1.6%
ssi
ism
Spending
pe
46 41
rel ce
House Prices acc
37 21 key moment

64,948,966 469,655 11.7% 14.4% 1.8% 245,559 $41.64

CBD Suburban
1,500,000
200,000 14%
20%
18% $47.10 Direct $37.92 Direct
150,000 12%
1,000,000 16% $33.70 Sublease $32.39 Sublease
10%
14%
100,000
500,000 12%
8%
0 6%
8%
0 Current High Low
6%
4%
(500,000)
(50,000) 4% Vacancy Rate 11.7% 14.4% 6.9%
2%
(1,000,000)
(100,000) 0%
2018
2018 2019
2019 2020
2020 2021
2023 Top Office Markets | Fort Lauderdale 53

Grand Rapids
Michigan
3.4% 0.7% 66.7%

Workforce
Metrics

• The population of Grand Rapids is expected to • Large sublease blocks and property auctions are
continue to increase through 2027, and Oxford becoming more common around the airport.
Economics expects employment growth at an annual • Tenants seeking new construction will find continued
rate of 0.8% over the next five years. Annual GDP development in southwest Grand Rapids.
growth is projected at 1.5% through 2027, aligning with
the U.S. average growth rate during the same period. • The amenity-rich downtown area is an attractive option
for tenants looking to relocate to bring employees back
• While the vacancy rate for the market overall increased to the office
ten basis points and ended the year at 7.3%, the
downtown area showed marked improvement, with
Tenant Challenges
vacancy declining from 10.7% to 8.7%. The suburban
market softened, however, increasing from 6.4% to • Rent increases due to inflationary pressures on
7.1% in the fourth quarter. operating costs will continue throughout 2023.
• Landlords have held asking rates firm. Downtown lease • Limited opportunities exist for tenants in search of
rates increased by $0.07 to $20.89 per square foot per discounted sublease space.
year in the fourth quarter, and suburban rates rose by • Despite rising interest rates, owner-occupied
$0.03 to $15.35. acquisitions are rising, shrinking the inventory of
• Investment remained strong for quality leased office leasable properties.
properties. For example, in the CBD, the Flat Iron sold
at the end of 2022 for nearly $10 million, or $322 per
square foot.

2023 2023-2027
ce den
-0.3% 1.5% ran i al
GDP v ib
43 34
t
en
co
em
nce
e x cit
rn
value falling
0.5% 0.6%
Population
32 29
m
optim
mis
1.5% 2.0%
ssi
ism
Spending
pe
14 23
rel ce
1.9% 2.8% ief eptan
House Prices acc
10 3 key moment

41,792,241 95,626 7.4% 7.1% 0.4% 23,812 $17.02

CBD Suburban
150,000
200,000 14%
20%
100,000
18%
12%
$22.25 Direct $16.28 Direct
150,000
50,000 10%
14%
100,000
0 12%
8%
(50,000) 6%
8%
0 Current High Low
(100,000) 6%
4%
(50,000)
(150,000)
4%
2%
Vacancy Rate 7.4% 13.0% 4.4%
(200,000)
(100,000) 0%
2018 2019 2020 2021 2022
2023 Top Office Markets | Grand Rapids 55

South Carolina
2.9% 0.5% 58.3%

Workforce
Metrics

• The region’s economy is growing rapidly, driven largely • Due to the flight-to-quality in the market, there is a
by an expansion of manufacturing. While this is spread lot of opportunity in the Class B or B- buildings whose
across many industries, automotive manufacturing tenants left for Class A space. A tenant could exploit
is attracting massive investment for conversions some chronic vacancies in these buildings with enough
to electric power trains. BMW, the region’s largest scale.
employer, announced a new battery plant in the • New construction is occurring in Spartanburg, which
market, and multiple tier-one suppliers have followed, has invested heavily in its downtown. Tenants with
powering the expansion of the professional and workforces distributed towards the eastern side of
business services sector that uses office space. the market could take advantage of the relatively less
• Class A vacancy in CBD is at an all-time low of 3.5% due expensive office inventory.
to the flight-to-quality and lack of new construction.
Asking rents for Class A space in the downtown areas Tenant Challenges
are approaching $27 a square foot.
• There is very little move-in ready space available, and
• Investment in the office sector slowed substantially almost all space is second-generation.
in the later half of 2022 due to the interest-rate
• Rents have continued to rise; therefore, rent is almost
environment. However, the lack of quality office space
guaranteed to increase if tenants relocate.
should drive investors prepared to upgrade properties
in 2023. • With Class A vacancy at all-time lows, tenants are left
with very few options and are struggling to get leverage
in negotiations with current landlords during renewal.
As a result, there’s a higher-than-normal number of
renewals because of the lack of potential options.

2023 2023-2027
ce den
-0.2% 1.6% ran i al
GDP v ib
40 32
t
en
co
em
nce
e x cit
rn
value falling
0.4% 0.6%
Population
38 33
m
optim
mis
0.9% 1.9%
ssi
ism
Spending
pe
34 26
rel ce
3.2% 2.0% ief eptan
House Prices acc
3 20 key moment

15,056,613 110,000 15.0% – 2.1% 80,000 $24.30

CBD Suburban
600,000
200,000 18%
20%
400,000 16%
18% $26.95 Direct $24.05 Direct
150,000
16%
200,000 14%
100,000 12%
0 12%
10%
(200,000) 8%
8%
(400,000) 6%
4%
(50,000)
(600,000)
4% Vacancy Rate 2543.0% 1592.0% 0.0%
2%
(800,000)
(100,000) 0%
0%
2018
2018 2019
2019 2020
2020 2021
2021 2022
Net
Net Absorption
Absorption Deliveries
Deliveries Vacancy
Vacancy Rate
Rate
2023 Top Office Markets | Greenville-Spartanburg 57

Hartford
Connecticut
4.1% 0.1% 65.9%

Workforce
Metrics

• Premier suburban properties will continue to benefit at • Tenants have many space options to choose from, and
the expense of CBD properties as tenants seek better in the case of subleases, often the availability of plug-
amenities and lifestyle options. and-play spaces willing to lease for shorter terms.
• With the CBD of Hartford dominated by large • With an ample inventory and an average Class A lease
employers and the smaller firms that cater to them, rate of $19.64, compared to $20.41 in the suburbs,
we predict an increase in vacancy, as these types of downtown Hartford remains enticing for tenants.
tenants continue to embrace the work-from-home • The political environment is friendly to business, and
trend for employees. federal COVID-19 relief money is still available to be
• Asking rates have remained consistent, though used to leverage growth and investment.
concessions are better than in years past (mostly free
rent). The challenge for landlords is that the sharp Tenant Challenges
increase in tenant improvement costs is proving
• With the sharp increase in costs for materials and
difficult to finance into a lease where tenants prefer
labor, financing tenant improvements has become
shorter lease terms.
challenging, causing tenants to accept longer lease
• Over the five years to 2019, the population of the terms than they may prefer.
Hartford metro area was relatively unchanged at
• Current and prospective employees’ desire to work
1.2 million people. However, through 2027, Oxford
from home challenges tenants who want current and
Economics expects the population to fall by an average
new hires to work collaboratively at company offices.
of 0.2% per year.
• Employers shifting to a hybrid model find managing
that workforce harder than anticipated.

2023 2023-2027
ce den
-1.2% 0.9% ran i al
GDP v ib
59 58
t
en
co
em
nce
e x cit
rn
value falling
-0.4% -0.2%
Population
59 56
m
optim
mis
0.6% 1.3%
ssi
ism
Spending
pe
44 51
rel ce
House Prices acc
35 52 key moment

47,260,591 (567,407) 12.7% 11.5% 1.0% 0 $22.07

CBD Suburban
600,000
200,000 14%
20%
18% $19.64 Direct $20.41 Direct
400,000
150,000 12%
200,000 10%
14%
100,000
0 12%
8%
(200,000) 6%
8%
0 Current High Low
(400,000) 6%
4%
(50,000) 4% Vacancy Rate 12.7% 17.2% 10.6%
(600,000) 2%
(800,000)
(100,000) 0%
2018 2019 2020 2021 2022
2023 Top Office Markets | Hartford 59

Houston
Texas
4.8% 1.0% 62.9%

Workforce
Metrics

• Vacancy rates grew to their highest level during the • At 3.5%, sublease availability has steadily climbed in
fourth quarter, jumping 100 basis points year-over- the last five quarters, with larger tenants reducing
year, to 23.2%. Class A space outperformed as the space.
flight-to-quality trend persisted, leaving overall vacancy • There is now a limited selection of large contiguous
70 basis points lower, to 23.8% year-over-year. blocks of space in Class A buildings in several
• Net absorption returned to a positive 98,820 square submarkets, including Westchase.
feet during the fourth quarter, finishing the year • Tenants’ ability to sign short-term leases will allow
at 284,877 square feet. The Woodlands submarket them more future flexibility.
boasted the metro’s largest gains, 578,610 square feet,
followed by Katy Freeway, 424,987 square feet, and the
Tenant Challenges
Northwest, 208,417 square feet.
• Commute times to jobs are a factor for office workers
• Landlords held asking rates firm but with generous
who’ve spent more time working from home than in
concessions of free rent and improvement allowances.
the office.
The Class A full-service rate ended at $35.46 per square
foot. At $45.05 per square foot, Downtown Class A • The flight-to-quality trend continues, as new leases and
rates were 31% higher than suburban rates. renewals are happening the most in Class A buildings,
with many tenants opting for smaller spaces.
• Like Austin and Dallas, Houston had substantial growth
after a rebound in the energy sector and an influx • New developments and approved projects now find
of people moving to the city. The city’s job growth in limited capital, potentially impacting ESG initiatives.
2022 was notably impressive, at 5.9%, surpassing the Few environmentally progressive buildings are being
U.S. average of 4.1%. According to Oxford Economics, delivered.
Houston job growth is expected to be 1.7% in 2023 and
will average an annual 1% through 2027.

2023 2023-2027
ce den
1.4% 1.8% ran i al
GDP v ib
4 15
t
en
co
em
nce
e x cit
rn
value falling
1.5% 1.5%
Population
5 3
m
optim
mis
1.9% 2.7%
ssi
ism
Spending
pe
8 2
rel ce
1.5% 2.4% ief eptan
House Prices acc
13 8 key moment

237,528,793 284,877 23.2% 27.7% 3.5% 1,881,604 $35.46

CBD Suburban
4,000,000
200,000 25%
20%
3,000,000 18% $45.05 Direct $31.22 Direct
150,000 20%
2,000,000
100,000 14%
1,000,000 15%
12%
(1,000,000) 10%
8%
0 Current High Low
6%
(2,000,000)
(50,000)
5%
4% Vacancy Rate 23.2% 23.2% 10.5%
(4,000,000)
(100,000) 0%
2018
2018 2019
2019 2020
2020 2021
2023 Top Office Markets | Houston 61

Indianapolis
Indiana
2.3% 0.7% 66.1%

Workforce
Metrics

• The Indianapolis metro area vacancy rate increased • Sublease availability has more than doubled in the
a minimal 14 basis points from 2021, to 18.1%. The past year. The average rental gap between a sublease
CBD rate grew the most, 444 basis points since the and direct availabilities is $4.25, allowing large users to
beginning of the pandemic in Q2 2020. lease discounted space in a desirable building.
• Tenants continue to demand and will pay a premium • Landlords in traditional office parks, feeling the
for high-quality space. Most notably, average rents pressure as vacancy grows, are listening to tenant
for the Carmel submarket soared as a result of new needs by investing in common spaces and amenities.
construction, to more than $35.00 per square foot. • Asking rents haven’t budged much since the onset
• Asking rents, while still up 1.0% year-over-year, are not of the pandemic. So instead, owners offer tenants
keeping pace with inflation. Asking rates began to fall, increased incentives and flexibility, including higher
by 1.4% in the fourth quarter, amid increasing vacancy tenant improvement packages, longer free rent
and competition from subleases. periods, and shorter terms.
• Indianapolis stands out in the Midwest for its recovery
from pandemic-related job losses, gaining a net 2.6% Tenant Challenges
in jobs from Q1 2020 to Q4 2021. According to Oxford • Top-tier Class A space in buildings with heavy amenity
Economics, the city’s job growth is expected to be 0.9% bases are quickly leased, leading tenants to new
in 2023 and average 0.6% from 2024 to 2027, slightly construction and causing asking rates in newer
higher than projected U.S. growth of 0.5%. developments to soar.
• Even with increasing vacancies, landlords still have
financial bottom lines they will not cross. Tenants need
to temper expectations of getting a deal and instead
focus on incentives and term-length flexibility.
• Despite increased demand to buy properties to gain
control over an ever-changing office market, owner/
user opportunities are very limited.

2023 2023-2027
ce den
-0.3% 1.3% ran i al
GDP v ib
45 45
t
en
co
em
nce
e x cit
rn
value falling
0.4% 0.5%
Population
37 36
m
optim
mis
0.8% 1.7%
ssi
ism
Spending
pe
40 39
rel ce
2.3% 2.2% ief eptan
House Prices acc
5 16 key moment

42,849,694 (123,706) 18.2% 18.8% 1.9% 172,046 $24.51

CBD Suburban
200,000
500,000 20%
400,000 18% $25.08 Direct $24.26 Direct
150,000
200,000 14%
100,000
100,000 12%
0
(100,000) 8%
0 Current High Low
(200,000) 6%
(300,000)
(50,000)
4% Vacancy Rate 18.2% 21.3% 14.5%
(500,000)
(100,000) 0%
2018 2019 2020 2021 2022
2023 Top Office Markets | Indianapolis 63

Jacksonville
Florida
2.8% 0.8% 62.5%

Workforce
Metrics

• While several Florida cities have had tremendous office • Due to increasing sublease availability, the market
job growth since the start of the pandemic, Jacksonville has become a tenant-favorable one and landlords are
outshone them all, at 15.2%, the second-highest rate striking competitive leases.
of any city in this survey. Over the next five years, • Office buildings can still be had for well below
Jacksonville job growth is projected to average 0.7%. replacement cost, which should be very attractive to
• The overall vacancy rate has remained relatively flat users who might buy all or most of a building.
year-over-year at 9.1% — nearly 400 basis points below • Market conditions now allow many long-term tenants
the national average — but sublease inventory remains to upgrade their buildings from Class B to A without
historically high. substantially increasing costs.
• Although landlords continue to push asking rates
higher, favorable tenant improvement allowances Tenant Challenges
and other inducements are holding down effective
• High construction costs make it hard to build out space
net rents.
without term or significant rent increases.
• Leasing is picking up, but an air of caution remains
• Ground-up Class A construction is nonexistent outside
while many occupiers still grapple with the post-COVID
of medical buildings, disappointing those looking for a
right-sizing. Some are starting to lay off workers to
true Class A experience.
prepare for the predicted recession.
• Permitting and construction delays remain common,
causing unreliable delivery dates.

2023 2023-2027
ce den
0.4% 1.7% ran i al
GDP v ib
19 21
t
en
co
em
nce
e x cit
rn
value falling
1.1% 1.2%
Population
16 10
m
optim
mis
0.7% 2.1%
ssi
ism
Spending
pe
43 20
rel ce
House Prices acc
32 57 key moment

54,964,291 338,042 10.6% 10.5% 1.0% 256,031 $24.25

CBD Suburban
200,000
1,000,000 20%
12%
800,000 18% $23.63 Direct $24.92 Direct
150,000 10%
400,000
100,000 14%
8%
12%
200,000
50,000 6%
0
8%
(200,000)
6%
(400,000)
(50,000) 4%
2% Vacancy Rate 10.6% 14.6% 6.5%
(800,000)
(100,000) 0%
2018
2018 2019
2019 2020
2020 2021
2021 2022
2023 Top Office Markets | Jacksonville 65

Kansas City
Missouri
3.1% 0.5% 66.9%

Workforce
Metrics
Market Overview consolidated employees to its Innovations Campus and

vacated several buildings throughout the metro, adding
• The 11.1% vacancy rate in the Kansas City metro is
inventory to an already soft market.
a 70-basis-point increase from one year ago and a
160-basis-point increase from the onset of the pandemic. • Pressure on rents is expected to increase next year
as more active requirements emerge and landlords
• By the end of 2022, the Kansas City office market
compete for tenants. High-quality, well-fit space will be
reached 777,894 SF of negative net absorption for the
subject to increasingly competitive terms.
year. The overall decline in occupancy and the steady
flow of new sublease space continue to raise the • Despite limited demand, asking rents continue to hold
vacancy rate. up surprisingly well. However, landlord concessions
to complete deals amid soft market fundamentals
• Overall asking rents increased slightly, to $20.53 per
are maintaining a significant gap between asking and
square foot in all product classes, as landlords are
effective rents.
resisting lowering rates. Class A rates have risen to an
average of $23.26 per square foot, and Class B to $19.05.
A gap is growing between existing Class A product and
Tenant Challenges
new Class A space, with asking rates in the mid-to-high • Office occupiers continue to grapple with workplace
$30-per-square-foot range for new office product. solutions and space needs, which will hinder leasing
volume and long-term leases to a certain extent.
• Much like other Midwest cities, Kansas City has not
fully regained its pandemic job losses, and it isn’t • Even with generous concessions, rising construction
expected to do so until Q1 2025. Though its job losses and material costs require some tenants to contribute
are less severe than those of other metropolitan areas to tenant improvement expenses. While packages vary
during the pandemic, its growth was minimal in 2022, greatly depending on lease terms and desired finishes,
an annual rate of only 1.8%, trailing the U.S. rate of allowance packages for long-term Class A spaces have
4.1%. Oxford Economics predicts a Kansas City job reached the $30–$60-per-square-foot range, while
growth rate of 1.1% in 2023 and an average growth construction costs have sometimes exceeded $60–$100
rate of 0.4% from 2024 to 2027. per square foot.
• Office sector construction remained limited to build-
Tenant Opportunities to-suits within the metro. With no speculative office
• The nearly two million square feet of sublease space construction, several second-generation space options
within the Kansas City market creates several high-quality are available, but few new Class A space options.
space options for tenants. Oracle (previously Cerner) has

2023 2023-2027
ce den
-0.4% 1.2% ran i al
GDP v ib
47 46
t
en
co
em
nce
e x cit
rn
value falling
0.5% 0.4%
Population
35 40
m
optim
mis
0.8% 1.5%
ssi
ism
Spending
pe
37 43
rel ce
0.6% 1.2% ief eptan
House Prices acc
17 44 key moment

106,556,120 (777,894) 11.1% 13.2% 1.9% 840,307 $23.26

CBD Suburban
200,000
2,000,000 20%
12%
18% $24.08 Direct $24.79 Direct
1,500,000
150,000 10%
1,000,000
100,000 14%
8%
12%
500,000
50,000 6%
8%
6%
(500,000)
(50,000) 4%
2% Vacancy Rate 11.1% 13.8% 8.1%
(1,000,000)
(100,000) 0%
2018
2018 2019
2019 2020
2020 2021
2023 Top Office Markets | Kansas City 67

Las Vegas
Nevada
5.4% 1.4% 60.7%

Workforce
Metrics

• Although tourism is bouncing back, Las Vegas • Although vacancy has reached a decade low, ample
employment has not returned to pre-pandemic space options remain, especially for tenants looking for
levels. However, over the next five years, metro area large blocks of space.
employment is projected to grow by 1.2% per year, • New Class A office buildings are under construction
sixth on Colliers’ list of top metros. GDP growth is also along Interstate 215, the most popular office corridor
expected to outperform, rising 1.9% annually during in the Valley.
that period, landing at eighth on the list.
• Asking rental rates appear to be peaking in the Valley.
• After four strong quarters of demand for office
product, Southern Nevada’s net absorption dipped in
Tenant Challenges
the fourth quarter of 2022 to 38,496 square feet and
ended the year at nearly 900,000 square feet. • Small office spaces have been extremely popular
over the past year, limiting space options for tenants
• Deliveries outpaced net absorption in the fourth
seeking smaller sizes.
quarter, increasing vacancy to 11.9%, from 11.7% one
quarter ago but down from 13.2% one year ago. • In the Las Vegas Valley tenants have been moving to
the Southwest submarket over the past decade, and
• Asking rental rates increased to $2.45 per square foot
construction is not keeping up.
per month ($29.40 annually) on a full-service basis,
setting a new high-water mark for the Valley. • Southern Nevada has long had trouble attracting
tenants because of a lack of higher-educated workers
in the employment pool.

2023 2023-2027
ce den
1.2% 1.9% ran i al
GDP v ib
6 8
t
en
co
em
nce
e x cit
rn
value falling
0.7% 0.9%
Population
27 17
m
optim
mis
1.2% 2.2%
ssi
ism
Spending
pe
28 16
rel ce
-8.0% -0.3% ief eptan
House Prices acc
57 58 key moment

46,238,624 881,326 11.9% 12.9% 1.5% 628,723 $34.24

CBD Suburban
200,000
1,600,000 16%
20%
1,400,000 18%
14%
150,000
12%
1,000,000
100,000 14%
800,000 10%
12%
600,000
50,000 8%
400,000 8%
6%
0 Current High Low
200,000 6%
4%
(50,000)0 4% Vacancy Rate 11.9% 22.8% 11.7%
(200,000) 2%
(400,000)
(100,000) 0%
2018
2018 2019
2019 2020
2020 2021
2023 Top Office Markets | Las Vegas 69

Los Angeles
California
5.6% 0.3% 64.1%

Workforce
Metrics

• In 2022, the Los Angeles metro area job growth • Large blocks of office spaces are offered for sublease,
was robust as tourism returned and its film sector and availability ticked up another ten basis points in Q4
recovered. The annual job growth rate of 5.4% 2022, to 4.6%.
outpaced the national rate of 4.1% for the previous • Hiring freezes and cutbacks in the tech and media
year, mostly driven by restaurants, arts and recreation, industries will also keep office demand low, as they
and other services sectors. Oxford Economics predicts were the major drivers in Los Angeles.
that the area’s job growth rate will be 1.6% in 2023 and
will average 0.4% from 2024 to 2027, slightly below the • Many large office-space requirements are on hold,
national rate of 0.5% for the same period. which favors tenants in the Los Angeles office market.
• Office availability hit an all-time high of 26.4%, with

Tenant Challenges
an increase in both direct and sublease space. Top
transactions in Q4 2022 comprised several large • Office development is down, dipping below two million
renewals and a few new deals based on a flight-to- square feet after major projects were delivered in West
quality. Los Angeles and Tri-Cities. This is much lower than the
peak in 2020, when more than five million square feet
• Net absorption in 2022 finished at negative 3.1 million
of new office construction was in the pipeline.
square feet, an improvement from 2021 and 2020,
when occupancy losses exceeded four million square • While overall average asking rents fell, Class A rates
feet yearly, most in the San Fernando Valley and held firm year-over-year as tenants took the slowdown
Downtown Los Angeles. as an opportunity to lease high-quality space.
• The average asking rental rate fell by 1% year-over- • The largest population losses in California have come
year, with Class A rent flat at $48.96. However, rising from Los Angeles County because of young families
sublease availability is preventing more overall rent and professionals seeking cheaper housing.
growth, as it’s usually discounted compared to a direct
lease.

2023 2023-2027
ce den
1.0% 1.7% ran i al
GDP v ib
7 24
t
en
co
em
nce
e x cit
rn
value falling
0.2% 0.0%
Population
43 50
m
optim
mis
1.2% 1.6%
ssi
ism
Spending
pe
27 40
rel ce
House Prices acc
45 4 key moment

220,519,658 (3,183,035) 21.9% 26.4% 4.6% 1,534,049 $48.96

CBD Suburban
200,000
3,000,000 20%
25%
18% $49.20 Direct $48.12 Direct
2,000,000
150,000
16%
1,000,000
100,000 14%
0 12%
15%
50,000
(1,000,000) 10% Historical Metrics | Last 20 years
8%
10%
(2,000,000)
0 Current High Low
6%
(3,000,000)
(50,000)
5%
4% Vacancy Rate 21.9% 17.5% 9.7%
(5,000,000)
(100,000) 0%
2018
2018 2019
2019 2020
2020 2021
Net Absorption
Deliveries Vacancy
Vacancy Rate
Rate
2023 Top Office Markets | Los Angeles 71

Memphis
Tennessee
4.6% 0.5% 62.3%

Workforce
Metrics

• The Memphis metro area’s overall vacancy increased • Tenants can choose from a wide selection of large
by 100 basis points year-over-year and finished 2022 at contiguous blocks of space, particularly in Class A
16.2%. Downtown fared better than the overall market suburban buildings, that historically have had limited
and ended with a 5.4% vacancy rate. supply.
• 394,007 square feet was absorbed in the fourth • Landlords are increasingly open to short-term leases,
quarter, pushing the year to date total to over 600,000 particularly renewals, allowing the market to stabilize
square feet. before tenants have to make long-term decisions.
• Overall asking rents held steady at $19.38 per square • Landlords aggressively pursue large, high-credit
foot at the end of 2022. Rates have remained stable tenants, offering substantial concessions on tenant
but are increasing in well-positioned assets, reaching improvement and free rent.
an average of $23.97 per square foot at year-end,
a new high. Effective rents remain well below pre- Tenant Challenges
pandemic levels.
• Inflation is increasing operating expenses significantly,
• Despite its vibrant industrial climate, Memphis had raising costs for existing tenants and limiting the
subpar job growth in 2022, an annual rate of 3.5% negotiation room typically found in landlords’ asking
lower than the national rate of 4.1%. According to rents.
Oxford Economics, Memphis is expected to have a job
• Standard tenant improvement allowances can no
growth of 1.2% in 2023 and an average growth rate of
longer cover the full cost of renovations, so tenants
0.2% from 2024 to 2027.
must pay themselves or amortize the extra costs on
top of the rental rate.
• Stated asking rates are now serving more as a floor
and typically must increase to account for the added
renovation.

2023 2023-2027
ce den
-0.4% 1.2% ran i al
GDP v ib
46 50
t
en
co
em
nce
e x cit
rn
value falling
0.1% 0.2%
Population
46 46
m
optim
mis
0.5% 1.4%
ssi
ism
Spending
pe
47 48
rel ce
1.5% 1.6% ief eptan
House Prices acc
14 31 key moment

36,745,205 611,234 13.2% 12.0% 0.3% 30,000 $23.97

CBD Suburban
1,000,000
200,000 16%
20%
800,000 18%
14% $17.66 Direct $20.62 Direct
150,000
600,000 12%
100,000 14%
400,000 10%
12%
200,000
50,000 8%
0 8%
6%
0 Current High Low
6%
(200,000) 4%
(50,000) 4% Vacancy Rate 13.2% 15.0% 9.9%
(400,000) 2%
(600,000)
(100,000) 0%
2018
2018 2019
2019 2020
2020 2021
2023 Top Office Markets | Memphis 73

Miami
Florida
2.9% 0.6% 61.2%

Workforce
Metrics

• Miami had strong growth in 2022, thanks to a healthy • Landlords continue to raise rents and decrease
influx of new residents and a thriving tourism industry concessions; high-credit tenants can drive better deals
that capitalized on the increased spending on travel than most.
and dining out. As a result, the city’s job market also • As tenants move to new construction buildings in the
flourished, growing annually by 5.4%, surpassing the flight-to-quality shift, other tenants find opportunities
U.S. growth rate of 4.1% for the same period. Oxford for space at existing buildings being improved and
Economics predicts that Miami’s job market will renovated.
continue to grow in 2023 by 1.2% and then moderate
to an average 0.6% for 2024 through 2027. • With several new developments set to break ground in
2023, tenants can secure contiguous blocks of space
• The flight-to-quality in Miami-Dade is still prevalent, while increasing their employees’ amenities.
driving asking rents up to $50.06 per square foot full-
service, a 10% increase year-over-year. Class A asking
Tenant Challenges
rents increased 12% year-over-year, to $57.18 per
square foot full-service. • Existing tenants looking to move, renew, or upgrade
space in Miami are competing against new-to-market
• Net absorption totaled 1.2 million square feet in 2022
tenants from more expensive areas, backed by large
in the face of 769,000 square feet of new supply. With
amounts of capital, creating a highly competitive
net absorption outpacing new supply, vacancy declined
market.
120 basis points year-over-year, to 10.1%.
• After strong net absorption in 2022, the market offers
• Although investment slowed in the second half of 2022,
significantly fewer options for tenants to relocate,
as market confidence returns and financing is easier
reducing their leverage in renewals.
to obtain, Miami’s office market is well positioned to
attract investors due to strong tenant demand and • Substantial increases in material costs and lead times
market fundamentals. have raised build-out costs and delayed move-ins.
• New buildings are in such high demand that they are
predominantly pre-leased.

2023 2023-2027
ce den
0.7% 1.6% ran i al
GDP v ib
16 25
t
en
co
em
nce
e x cit
rn
value falling
0.5% 0.5%
Population
34 35
m
optim
mis
0.4% 1.6%
ssi
ism
Spending
pe
51 42
rel ce
House Prices acc
39 13 key moment

97,529,687 1,195,346 10.1% 12.1% 0.9% 4,194,115 $57.18

CBD Suburban
2,000,000
200,000 12%
20%
18% $70.19 Direct $45.03 Direct
1,500,000
150,000 10%
1,000,000 14%
100,000 8%
500,000 12%
50,000 6%
0 8%
(500,000) 6%
(50,000) 4%
2% Vacancy Rate 10.1% 14.8% 6.2%
(1,000,000)
(1,500,000)
(100,000) 0%
2018
2018 2019
2019 2020
2020 2021
2023 Top Office Markets | Miami 75

Milwaukee
Wisconsin
3.4% 0.2% 66.3%

Workforce
Metrics

• Despite progress, the metro area has not yet fully • The availability rate ended the year at a new high of
rebounded from the job losses of the pandemic, and 20.35%, which gives tenants a wide variety of options
employment in Q4 of 2022 remained 2.6% lower than for space size, quality, and desired location, for
in Q1 of 2020. Oxford Economics expects Milwaukee’s signings in 2023.
job market to grow 1.3% in 2023 and then by an • With Class A vacancy at 15.8%, landlords are offering
average 0.2% from 2024 to 2027. However, a complete higher tenant improvement allowances to lease vacant
recovery is not expected for another ten years. spaces.
• The office market reached its highest vacancy rate • By downsizing space, tenants can relocate to a higher-
ever at year-end, to 16.3%. On a positive note, the quality building with comparable total rent costs.
CBD submarket recorded a negligible five-basis-point
increase during the fourth quarter.
Tenant Challenges
• Overall, the market had outsized negative absorption
• At 1.5%, sublease availability is low, leaving tenants
in 2022, with tenant downsizing the primary culprit
fewer choices for discounted spaces.
leading to just over 687,000 square feet of negative
absorption. Many of these downsizing tenants seek • Construction costs continued to rise in 2022 and
higher-quality, heavily amenitized spaces to attract are expected to remain elevated in 2023, and many
employees to the office. tenants will need to spend to cover the spread over
their improvement allowances.
• The supply of new inventory moderated in 2022, to
only 219,322 square feet, compared to 686,050 square • The average CPI increase in 2022 was about 5.1%.
feet in 2021. Tenants now have higher operating expenses per
square foot for new leases.

2023 2023-2027
ce den
-0.5% 1.2% ran i al
GDP v ib
52 51
t
en
co
em
nce
e x cit
rn
value falling
-0.2% -0.1%
Population
54 54
m
optim
mis
0.3% 1.1%
ssi
ism
Spending
pe
52 56
rel ce
0.5% 1.1% ief eptan
House Prices acc
18 48 key moment

50,931,944 (687,360) 16.3% 20.4% 1.5% 228,357 $28.10

CBD Suburban
600,000
200,000 18%
20%
18%
16% $32.42 Direct $23.89 Direct
400,000
150,000
16%
200,000 14%
100,000 12%
0 12%
10%
(200,000) 8%
8%
(400,000) 6%
4%
(50,000) 4% Vacancy Rate 16.3% 16.3% 8.4%
(600,000) 2%
(800,000)
(100,000) 0%
2018 2019 2020 2021 2022
2023 Top Office Markets | Milwaukee 77

Minneapolis
Minnesota
2.3% 0.3% 69.0%

Workforce
Metrics

• As in many other cities in the Midwest, Minneapolis’ • Leasing concessions in the Minneapolis CBD are at
growth was impeded in 2022 due to its sluggish an all-time high. Landlords are building out amenity
manufacturing sector. The city’s annual job growth centers in most Class A and many Class B buildings
rate of 3.2% fell behind the national average of 4.1% and offering tenants months of free rent and generous
for 2022. Looking ahead, Oxford Economics predicts tenant improvement allowances.
job growth of 1.5% for Minneapolis in 2023, and an • While the number of workers in offices is growing
average rate of 0.4% from 2024 to 2027, slightly below modestly quarter-over-quarter, the current return-
the national rate of 0.5% for the four-year period. Total to-work landscape suggests tenants will continue to
employment in the metropolitan area remains 1.3% downsize into higher-quality space across the market.
lower than before the pandemic, and a full recovery is
not expected until Q3 2025. • Sublease space in the market is growing rapidly,
allowing tenants to undercut market rates on short-
• The office market’s overall vacancy rate continues to term leases.
rise, to 12.8% from 11.5% last quarter and 10.3% at the
end of 2021. The nearly 650,000 square feet of new
Tenant Challenges
Class A space delivered in 2022 pushed the Class A
vacancy rate to 15.8%. • As return-to-office estimates reach closer to 60%
metrowide, buildings still struggle to appear active.
• Because Minneapolis-St. Paul has a relatively low
Tenants are challenged to find buildings that activate
unemployment rate of 2.1%, the war for talent in the
their employees and encourage the return to the
metro contributes to tenants’ flight-to-quality, as Class
office.
A office buildings enhance recruitment.
• Low unemployment rates and higher-than-average
• Although Class A asking rates declined in the fourth
median household incomes have created competition
quarter, to $28.68 for the year, rates were still up
for workers, while companies try to balance rising
for the year. In contrast, Class B asking rates are the
labor costs with real estate needs.
lowest since the height of the pandemic in Q2 2020.
• A limited amount of new space was delivered in 2022.
Tenants looking for premier new construction will find
their options limited, with only one million square feet
under construction.

2023 2023-2027
ce den
0.1% 1.4% ran i al
GDP v ib
29 37
t
en
co
em
nce
e x cit
rn
value falling
0.7% 0.6%
Population
30 27
m
optim
mis
1.9% 2.1%
ssi
ism
Spending
pe
7 21
rel ce
House Prices acc
33 19 key moment

186,261,868 (2,321,408) 12.8% 13.7% 2.1% 1,064,187 $28.68

CBD Suburban
2,000,000
200,000 14%
20%
1,500,000 18% $34.48 Direct $33.49 Direct
150,000 12%
10%
14%
500,000
100,000
12%
8%
0
(500,000) 6%
8%
(1,000,000)
0 Current High Low
6%
4%
(1,500,000)
(50,000) 4% Vacancy Rate 12.8% 12.8% 7.0%
(2,000,000) 2%
(2,500,000)
(100,000) 0%
2018
2018 2019
2019 2020
2020 2021
2023 Top Office Markets | Minneapolis 79

Nashville
Tennessee
2.7% 1.2% 69.6%

Workforce
Metrics

• Nashville’s economy had some of the healthiest growth • Average sublease rents at $25.35 per square foot are
in the nation in 2022, with annual job growth of 5.8%, 17% below direct rents in Nashville, a competitive
exceeding the U.S. growth of 4.1%. Notably, its tech advantage for tenants needing space.
sector had job growth of 14.9% in 2022, a token of • Tenants can choose from a wide selection of large
Nashville’s ability to attract and retain tech companies contiguous blocks of space in existing Class A second-
in previous years. generation product, especially in the suburban
• The final quarter of 2022 showed continued submarkets. Multiple building owners across the
improvement for the office market, with 233,653 market are developing spec suites in their properties,
square feet absorbed in Q4. offering tenants a turn-key, move-in-ready opportunity
• Nashville’s office rents rose 2.7% year-over-year, to bypass permitting processes, construction, etc.
closing Q4 2022 at $31.80 per square foot. The demand • Nearly 2.7 million square feet of new product is
for Class A space continues to push rates beyond underway, providing ample options for tenants seeking
previous records, despite the vacancies across the new space.
market.
• While just over 765,000 square feet of new product was Tenant Challenges
delivered, the market has nearly 2.7 million square feet • Companies are still navigating their office footprint
underway. Without significant pre-leasing, this space needs as remote work continues to factor into tenants’
will put more pressure on a vacancy rate that set a new workplace strategies.
high-water mark at the end of the year.
• With record-breaking rental rates, tenants are
evaluating reducing space to keep occupancy costs in
line with previous years.
• Traffic congestion, transportainment, and the proximity
to the noise and entertainment along Broadway
continue to push tenants out of the urban core and
into the fringe areas.

2023 2023-2027
ce den
0.0% 1.8% ran i al
GDP v ib
34 13
t
en
co
em
nce
e x cit
rn
value falling
1.1% 1.0%
Population
13 16
m
optim
mis
1.4% 2.1%
ssi
ism
Spending
pe
18 19
rel ce
2.0% 2.9% ief eptan
House Prices acc
6 2 key moment

60,592,306 287,885 15.1% 18.9% 3.9% 2,692,000 $36.95

CBD Suburban
3,000,000
200,000 16%
20%
18%
14% $37.40 Direct $33.66 Direct
2,500,000
150,000
12%
2,000,000 14%
100,000
10%
12%
1,500,000
50,000 8%
1,000,000 8%
6% Current High Low
0
500,000 6%
4%
(50,000)0 4% Vacancy Rate 15.1% 15.1% 4.6%
2%
(500,000)
(100,000) 0%
2018
2018 2019
2019 2020
2020 2021
2023 Top Office Markets | Nashville 81

New Hampshire
New Hampshire
2.3% 0.4% 68.6%

Workforce
Metrics

• Oxford Economics projects that New Hampshire’s GDP • With some larger tenants reducing space, the larger
will increase by 1.7% annually over the next five years, blocks left are allowing firms to consolidate offices and
faster than the projected average 1.5% annual growth move into a single location.
for the U.S. Total employment growth is anticipated to • While the Class B vacancy rate declined in 2022,
reach 1.3% in 2023 and an average of 0.6% from 2024 tenants have a large pool of availabilities to choose
to 2027. from, as overall vacancy increased by 540 basis points
• The office vacancy rate in New Hampshire declined by over the last three years.
70 basis points, ending the year at 10.7%. Overall, Class • Landlords are not offering rental rate discounts;
B vacancy fell by 120 basis points in 2022, more than in however, many tenants have negotiated for
all other office building classes. higher tenant improvement allowances and other
• Offices converted to residential use in the Concord, concessions.
Manchester, and Nashua submarkets have aided in
bringing the overall vacancy rate down. Tenant Challenges
• Rents continued to rise across all building classes. The • Lower building inventory due to residential conversions
average asking rent climbed by 5.4% ($1.06 per square is resulting in falling vacancy and elevating rents.
foot) during 2022 and ended at $20.65 per square
• Except in the Portsmouth submarket, new office space
foot modified gross. The highest rent growth was in
is hard to come by, with little to no office construction
the Dover and Salem submarkets, after new projects
in development over the next few years.
delivered at above-market rental rates.
• Although the vacancy rate is well above pre-pandemic
levels, rising rents have hastened some firms’ decisions
to adopt a hybrid or full work-from-home model.

2023 2023-2027
ce den
0.7% 1.7% ran i al
GDP v ib
14 22
t
en
co
em
nce
e x cit
rn
value falling
0.2% 0.4%
Population
45 41
m
optim
mis
1.3% 1.8%
ssi
ism
Spending
pe
26 34
rel ce
House Prices acc
29 41 key moment

28,324,513 160,930 10.7% 10.9% 1.0% 104,664 $24.85

CBD Suburban
300,000
200,000 12%
20%
200,000 18% – Direct $24.85 Direct
150,000 10%
100,000
100,000 14%
8%
0 12%
(100,000)
50,000 6%
(200,000) 8%
6%
(300,000)
(50,000) 4%
2% Vacancy Rate 10.7% 11.7% 7.2%
(500,000)
(100,000) 0%
2018 2019 2020 2021 2022
2023 Top Office Markets | New Hampshire 83

New Jersey
New Jersey
4.2% 0.1% 61.7%

Workforce
Metrics

• The New Jersey office market had a setback in 2022 as • Sublease options with extended terms and high-
downsizing by tenants contributed to rising vacancy, quality buildouts are at an all-time high and at a steep
up 30 basis points over the past year, to 16.3%. Many discount.
tenants reduced space on a long-term basis last year, • Large corporate users have an abundance of Class A
reflecting a sustained shift towards hybrid work. availabilities to choose from, many recently renovated
• Year-end leasing totaled 10.4 million square feet, a with amenities designed to enhance wellness and
25.9% increase over 2021 and the most activity since collaboration. These buildings are an opportunity for
2018. Well-located buildings with abundant amenities tenants looking to recruit talent and lure employees
have dominated recent leasing because of the ongoing back to the office.
flight-to-quality trend. • While asking rents have held firm on average, tenants
• The overall full-service rent averaged $29.70 per have the upper hand in lease negotiations, obtaining
square foot at the end of 2022, up 2% from one year favorable concessions on long-term leases
ago. Concessions offered by landlords, including rent
abatements and tenant improvement allowances, Tenant Challenges
remain generous.
• As flight-to-quality persists, trophy buildings are
• GDP growth in 2023 is projected at -0.5%, considerably commanding higher rents.
lower than the national average of 0.1%. Over the next
• Attracting talent will continue to be challenging due to
five years, GDP and employment growth are projected
low unemployment, frequent outmigration, and the
to be in the bottom quartile of the markets featured in
preference for hybrid and remote work.
this report.
• High construction and labor costs have made tenant
buildouts more expensive.

2023 2023-2027
ce den
-0.5% 1.2% ran i al
GDP v ib
51 48
t
en
co
em
nce
e x cit
rn
value falling
0.3% 0.4%
Population
40 39
m
optim
mis
-0.2% 1.1%
ssi
ism
Spending
pe
59 55
rel ce
House Prices acc
36 33 key moment

198,050,950 (452,443) 16.3% 22.8% 4.0% 233,668 $32.46

CBD Suburban
2,000,000
200,000 18%
20%
1,500,000 18%
16% – Direct $32.78 Direct
150,000
1,000,000 16%
500,000
100,000 14%
12%
12%
0 10%
(500,000) 8%
8%
(1,000,000)
6%
(1,500,000) 4%
(50,000) 4% Vacancy Rate 16.4% 17.3% 12.9%
(2,000,000) 2%
(2,500,000)
(100,000) 0%
2018
2018 2019
2019 2020
2020 2021
2021 2022
Net Absorption
Deliveries Vacancy
Vacancy Rate
Rate
2023 Top Office Markets | New Jersey 85

New York
New York
4.8% 0.4% 61.5%

Workforce
Metrics

• Manhattan’s average asking rent increased by a • With over 5,000 separate availabilities for firms seeking
notable 1.8% during Q4 2022, to $75.41 per square space of less than 25,000 square feet, tenants have
foot. The jump in pricing was largely driven by a mix abundant space options.
of below-average-priced spaces removed from the • Demand has not yet returned to pre-pandemic levels.
market, above-average-priced spaces added, and Meanwhile, availability has increased by more than
higher repricing in pockets of Manhattan. 70% since March 2020, leading to landlord competition.
• At 16.9%, the Q4 2022 availability rate expanded by • Millions of square feet in new construction and major
0.5 percentage points from the third quarter, the first building renovations will allow tenants to seek space
quarterly increase since December 2021. efficiencies and attract and retain talent.
• Manhattan office leasing declined by 46.5%. And at
4.94 million square feet, that is the lowest quarterly Tenant Challenges
leasing volume since Q2 2021 and the sharpest
• Challenges remain for tenants in determining space
quarterly drop since Q2 2020.
needs for their long-term work-from-home/hybrid/
• Over the next five years, Oxford Economics projects return-to-office plans.
that Manhattan will have an average annual GDP
• Uncertainty on the direction of the economy and its
growth rate of 1.2%, lower than the average national
impact on the office sector make it difficult to assess
rate. The finance, real estate, wholesale, and retail
when the New York City office market will bottom out
sectors are anticipated to be the main drivers, while
and begin its recovery.
the city’s employment rate is expected to rise by an
average of 1.0% annually between 2023 and 2027. • High construction and labor costs are making tenant
buildouts more expensive.

2023 2023-2027
ce den
0.1% 1.4% ran i al
GDP v ib
28 41
t
en
co
em
nce
e x cit
rn
value falling
1.1% 0.6%
Population
12 36
m
optim
mis
1.7% 1.8%
ssi
ism
Spending
pe
12 27
rel ce
House Prices acc
34 24 key moment
Office Metrics | Q4 2022*

540,360,852 1,315,058 11.8% 16.9% 3.8% 14,711,123 $81.51
Absorption, New Supply & Vacancy* Average Class A FSG Rates*

CBD Suburban
200,000
20,000,000 20%
14%
15,000,000 18% $87.72 Direct – Direct
150,000 12%
10,000,000 16% $62.11 Sublease – Sublease
10%
14%
5,000,000
100,000
12%
8%
0
(5,000,000) 6%
8%
(10,000,000)
0 Current High Low
6%
4%
(15,000,000)
(50,000) 4%
2%
Vacancy Rate 11.8% 11.8% 3.7%
(25,000,000)
(100,000) 0%
2018 2019
2018 2019 2020
2020 2021
*Data for Manhattan only
2023 Top Office Markets | New York 87

Norfolk
Virginia
3.3% 0.2% 60.2%

Workforce
Metrics
Market Overview • Forty-two leases larger than 10,000 square feet were
signed in 2022. Renewals prevailed, including 28
• A lack of significant new office construction and limited
totaling 580,000 square feet, while 14 new leases
plans for future development have led to record-
totaled 260,000 square feet.
low vacancies and rising rental rates in the top-tier
office submarkets. Conversely, Class B and C space in • A large amount of quality office space remains
less desirable submarkets, especially call center and throughout the market. Among it is space in the
sublease space, is proving problematic after negative newest office development, the 170,000-square-foot
absorption in 2022 and anticipated negative absorption Class A Summit Pointe, more than half of which has
in 2023. been leased.
• The market had 325,000 square feet of negative net
absorption in 2022, largely due to a few major events.
Tenant Challenges
Amerigroup vacated over 70,000 square feet of space • The potential recession may impact the market’s
at Corporate Center V, Sentara vacated 50,000 square short-term outlook, and company strategies will largely
feet at 863 Glenrock Road, and IQVIA vacated 50,000 determine the long-term future of the office market.
square feet of space at Dendrite One with the Liberty • The labor force in the Norfolk market has been
Executive Park. shrinking since the beginning of the pandemic,
• Rents showed positive movement in 2022, ending at requiring employers to pay higher wages for quality
$21.16 per square foot, an increase of $0.24. Class talent. The market’s civilian labor force has shrunk
A rents ended at $23.32 per square foot, up $0.05 from 884,000 in July of 2019 to 840,000 employees as
year-over-year, while Class B rents ended at $19.08, of December 2022, a decrease of 5%.
up $0.18 year-over-year. A lack of supply-side pressure • Worldwide supply chain issues have delayed multiple
provides optimism about this positive trend. office developments in the market, and only one office
development has started since 2020, Tech Center
Tenant Opportunities Building II, which broke ground in Q3 2022. The lack
• Available sublease space remains prevalent, 370,000 of new product provides few options for recently built
square feet at the end of Q4 2022, more than three space.
times higher than available sublease space in the
market in Q2 2020, before the initial negative effects of
the pandemic.

2023 2023-2027
ce den
-0.8% 0.9% ran i al
GDP v ib
58 0
t
en
co
em
nce
e x cit
rn
value falling
-0.2% 0.0%
Population
52 0
m
optim
mis
0.1% 1.2%
ssi
ism
Spending
pe
57 0
rel ce
House Prices acc
27 0 key moment

23,813,285 (324,813) 13.3% 20.4% 1.6% 80,000 $23.32

CBD Suburban
200,000
400,000 14%
20%
300,000 18% $28.23 Direct $21.60 Direct
150,000 12%
200,000
10%
14%
100,000
100,000 12%
8%
0
6%
8%
(100,000) Current High Low
0
6%
4%
(200,000)
(50,000) 4% Vacancy Rate 13.3% 18.4% 8.1%
(300,000) 2%
(400,000)
(100,000) 0%
2018 2019 2020 2021 2022
2023 Top Office Markets | Norfolk 89

Oakland
California
3.8% 0.6% 60.9%

Workforce
Metrics
Market Overview • Landlords are providing more concessions such

as free rent, moving allowances, increased tenant
• The Oakland metropolitan area’s office vacancy rate
improvement and FF&E allowances, and in some cases,
increased from 15.5% to 15.6% in the fourth quarter
not requiring personal guarantees or larger security
of 2022 and continues to be affected by the pandemic
deposits.
and remote/hybrid working.
• Landlords are allowing tenants to “blend and extend”
• Net absorption was negative 12,691 square feet for
to blend the current higher contract rate amount over
the fourth quarter and negative 613,741 square feet
the term with a lower rate, extending the term for a
year-to-date in 2022. The combined average asking
lower overall rate.
rate for all classes of office space decreased by $0.01
per square foot to $4.44 per square foot per month
full-service.
Tenant Challenges
• With fewer people on the street and the shuttering of
• The overall sublease vacancy rate increased slightly
retail, the area is having more vandalism and crime,
to a minimal 3.0%. In the largest new lease of the last
forcing tenants to rethink urban office needs. They
quarter, biotech firm Metagenomi subleased 75,662
are not willing or able to commit to buildings that they
square feet in EmeryStation West at 5959 Horton
have traditionally occupied in the past and are now
Street in Emeryville.
forced to find buildings with more internal amenities
• Robust GDP growth for Oakland is projected to and parking, which will be more costly.
outpace the U.S. average by a wide margin in 2023,
• Tenants have difficulty planning their space utilization,
to 0.8%, compared to 0.1% for the U.S. Over the next
resulting in short-term leases or subleases to kick the
five years, it is predicted to be the 16th highest-ranked
can down the road.
city for GDP and 18th highest-ranked for employment
growth. • Tenants with good credit who can commit to long-
term leases can strike very economical lease terms.
Tenant Opportunities However, some are concerned that a few of these
buildings may be financially distressed soon.
• The abundance of available sublease space allows
tenants to acquire space without the tenant
improvement process, bypassing the planning,
permitting, and buildout.

2023 2023-2027
ce den
0.8% 1.8% ran i al
GDP v ib
11 16
t
en
co
em
nce
e x cit
rn
value falling
0.8% 0.6%
Population
24 28
m
optim
mis
1.4% 1.7%
ssi
ism
Spending
pe
19 35
rel ce
House Prices acc
56 43 key moment

35,443,469 (613,741) 15.6% 18.8% 4.4% 611,751 $59.04

CBD Suburban
800,000
200,000 18%
20%
600,000 18%
16% $60.84 Direct $54.84 Direct
150,000
400,000 16%
200,000 14%
12%
100,000
0 12%
10%
(200,000)
8%
(400,000) 8%
(600,000) 6%
4%
(800,000)
(50,000) 4% Vacancy Rate 15.6% 16.8% 5.0%
(1,000,000) 2%
(1,200,000)
(100,000) 0%
2018
2018 2019
2019 2020
2020 2021
2023 Top Office Markets | Oakland 91

Omaha
Nebraska
2.4% 0.8% 67.8%

Workforce
Metrics

• Omaha continues to have one of the lowest • With only 2.5 million square feet of new product over
unemployment rates in the country, at 2.4%, but the last five years, available Class A office space is
employment growth is anticipated to be below the limited.
national average over the next five years. Oxford • The supply of available sublease space has continued
Economics expects that employment will increase by to rise, to 2.8%. Tenants with lease flexibility can save
0.5% per year through 2027. substantially by subleasing compared to similar direct
• As expected, and though still positive, net absorption spaces.
of 120,554 square feet in 2022 failed to keep pace with • Landlords are offering aggressive tenant improvement
the nearly 350,000 square feet absorbed in 2021. packages, allowing many to build their space without
• Standing at 9.2%, the overall office vacancy rate more out-of-pocket expenses.
declined 17%, year-over-year and is comfortably below
the 15% in 2016. Tenant Challenges
• Downtown Omaha has over $2 billion in construction • Rising construction costs make it difficult for many
projects in the works, including Mutual of Omaha’s new tenants to stay within their budget.
headquarters building, which broke ground in January
• Over the next five years, the metro area is projected
2023. The new $600 million headquarters will be the
to rank in the bottom U.S. quartile for employment
tallest office building in Nebraska and a multi-state
growth.
area (IA, MO, KS, SD, & WY).
• Both sublease availability and vacancy rates are less for
Class B than Class A office space, offering Class B office
tenants a more challenging environment.

2023 2023-2027
ce den
-0.3% 1.4% ran i al
GDP v ib
44 38
t
en
co
em
nce
e x cit
rn
value falling
0.9% 0.9%
Population
21 21
m
optim
mis
0.9% 1.7%
ssi
ism
Spending
pe
33 36
rel ce
0.4% 1.6% ief eptan
House Prices acc
19 32 key moment

35,021,354 120,554 9.2% 11.6% 2.8% 436,935 $33.01

CBD Suburban
1,200,000
200,000 12%
20%
1,000,000 18% $34.21 Direct $32.64 Direct
150,000 10%
800,000
100,000 14%
8%
600,000
12%
400,000
50,000 6%
200,000 8%
6%
0
(50,000) 4%
2% Vacancy Rate 9.2% 15.0% 5.5%
(200,000)
(400,000)
(100,000) 0%
2018
2018 2019
2019 2020
2020 2021
2023 Top Office Markets | Omaha 93

Orange County
California
5.6% 0.3% 64.1%

Workforce
Metrics

• Uncertainty about market conditions continued to • With landlords looking to fill space quickly, tenants see
drive up Orange County’s office vacancy, to 18% at the improved economics, allowing deals to close faster.
end of 2022, a 130-basis-point increase from 2021. • Tenants benefit from the aggressive stance of
• Similar to 2021, the area posted mostly negative net landlords focusing more on occupancy and less on
absorption in 2022. While the fourth quarter recorded lease rates. Class A asking lease rates in suburban
nearly 450,000 square feet of negative absorption, areas are significantly lower than in the CBD.
about 110,000 square feet were returned to the market • At 1.6%, sublease vacancies stand at their lowest levels
each quarter throughout 2022. for 2022.Tenants are taking advantage of shorter lease
• Availability rates in the Airport Area submarket options for greater flexibility moving forward.
dropped in Q4 2021 to 23.7%, the highest availability
rate for all Orange County submarkets, but a marked Tenant Challenges
improvement over the 25% rate in Q3 2022.
• Rising construction costs have meant virtually no new
• In 2022, the annual job growth rate of 5.4% outpaced developments in the market.
the national average of 4.1% for the previous year.
• Demand for space continues to increase; tenants see
Notably, job growth was driven by restaurants, arts
less available supply for their favored property types.
and recreation, and other services sectors. Oxford
Economics predicts that the area job growth will be • New developments are facing longer wait times
1.6% in 2023 and an average of 0.4% from 2024 to for permits, so the delivery of new space has been
2027, falling slightly below the national rate of 0.5% for significantly slowed.
the same period.

2023 2023-2027
ce den
0.4% 1.6% ran i al
GDP v ib
21 28
t
en
co
em
nce
e x cit
rn
value falling
0.2% 0.3%
Population
42 43
m
optim
mis
1.4% 1.8%
ssi
ism
Spending
pe
17 32
rel ce
House Prices acc
44 7 key moment

84,797,897 (441,330) 18.0% 24.1% 4.5% 258,194 $2.96

CBD Suburban
1,500,000
200,000 20%
18% $36.72 Direct $33.51 Direct
1,000,000
500,000 14%
100,000
0 12%
(500,000) 8%
0 Current High Low
(1,000,000) 6%
(50,000)
4% Vacancy Rate 18.0% 20.5% 8.1%
(1,500,000)
(2,000,000)
(100,000) 0%
2018
2018 2019
2019 2020
2020 2021
2023 Top Office Markets | Orange County 95

Orlando
Florida
3.3% 1.2% 63.4%

Workforce
Metrics

• At the end of the fourth quarter, the market’s overall • At 4.0%, sublease availability is at an all-time high,
vacancy was 11.8%, 330 basis points higher since the affording tenants many short-term lease options.
start of the pandemic. Sublease spaces also benefit tenants looking for a
• While Class A space ended 2022 at 500,000 square quick start, as many spaces are offered turn-key.
feet of negative absorption, Class B and C properties • Over 40% of all sublease space features large blocks
posted 260,000 square feet of positive absorption. greater than 50,000 square feet.
• The average asking rate at year-end was $24.80 per • Tenants seeking to relocate to the Orlando market with
square foot on a full-service basis. Meanwhile, Class A the intention of future growth in the area can lock in
space averaged $28.61 per square foot at full service. short-term subleases.
• With a surge in tourism, Orlando’s economy has grown
remarkably. In 2022, job growth was 6.6%, easily Tenant Challenges
outpacing the U.S. rate of 4.1% from the previous • Call centers are having a hard time getting employees
year. As expected, the growth was led by restaurants, to return to the office when many remote jobs are
arts and recreation, and hotels. For the coming years, available.
Oxford Economics projects a job growth rate of 2% for
• Talent will continue to leave the area due to the high
Orlando in 2023, and an average of 1.1% from 2024 to
cost of living and lack of housing availability.
2027, exceeding the projected U.S. rate of 0.5%.
• Landlords have held asking rates firm and offered few
concessions while pushing terms averaging five to
seven years.

2023 2023-2027
ce den
0.8% 1.9% ran i al
GDP v ib
12 10
t
en
co
em
nce
e x cit
rn
value falling
1.6% 1.4%
Population
3 4
m
optim
mis
1.3% 2.4%
ssi
ism
Spending
pe
24 9
rel ce
0.0% 1.7% ief eptan
House Prices acc
23 29 key moment

58,662,592 (243,447) 11.8% 16.7% 3.9% 278,917 $22.73

CBD Suburban
800,000
200,000 14%
20%
18% $28.44 Direct $28.47 Direct
600,000
150,000 12%
400,000 10%
14%
100,000
200,000 12%
8%
0 6%
8%
0 Current High Low
(200,000) 6%
4%
(50,000) 4% Vacancy Rate 11.8% 17.2% 8.2%
(400,000) 2%
(600,000)
(100,000) 0%
2018 2019 2020 2021 2022
2023 Top Office Markets | Orlando 97

Palm Beach
Florida
2.9% 0.4% 60.6%

Workforce
Metrics

• The flight-to-quality is still prevalent, driving asking • As many tenants move to new-construction buildings,
rental rates to an all-time high of $40.70 per square tenants will also find opportunities at existing and
foot full-service, a 9.5% increase year-over-year, while newly renovated buildings.
Class A asking rents grew 8.3% year-over-year, to • The 1.1 million square feet under construction in Palm
$46.43 per square foot full-service. Beach, the largest pipeline of new construction in over
• The influx of new-to-market tenants has pushed down three years, will provide new and quality space options
vacancies 120 basis points year-over-year. It provides for tenants.
a positive outlook for the lease-up of the 1.1 million • With a number of new-construction buildings set to
square feet under construction. break ground in 2023, tenants can secure contiguous
• Although investment slowed in the second half of blocks of space while also increasing the amenities for
2022 due to uncertainty in the financial markets, as their employees.
confidence returns and financing is easier to obtain,
the Palm Beach County office market is an ideal Tenant Challenges
investment environment due to its strengthening
• Existing tenants looking to move, renew, or upgrade
market fundamentals.
their space within Palm Beach County are competing
• Over the next five years, the area is expected to be in against new-to-market tenants backed by large
the top quartile for population growth. However, GDP, amounts of capital, creating a highly competitive
employment, and spending growth are projected to market.
hover near the national average.
• Due to strong net absorption over the last two
years, the market offers significantly fewer options
for tenants to relocate, reducing their leverage in
renewals.
• Major increases in construction and material costs
and demand for contractors and materials are causing
planning, permitting, and construction timeframes to
double compared to pre-pandemic.

2023 2023-2027
ce den
-0.5% 1.6% ran i al
GDP v ib
50 30
t
en
co
em
nce
e x cit
rn
value falling
1.1% 1.1%
Population
17 14
m
optim
mis
0.1% 1.8%
ssi
ism
Spending
pe
56 29
rel ce
House Prices acc
42 27 key moment

52,148,515 853,510 8.3% 12.2% 1.6% 1,111,003 $46.43

CBD Suburban
2,000,000
200,000 12%
20%
18% $50.61 Direct $43.64 Direct
150,000 10%
100,000 14%
8%
1,000,000 12%
50,000 6%
500,000 8%
6%
0
(50,000) 4%
2% Vacancy Rate 8.3% 18.1% 7.3%
(500,000)
(100,000) 0%
2018
2018 2019
2019 2020
2020 2021
2023 Top Office Markets | Palm Beach 99

Philadelphia
Pennsylvania
4.6% 0.2% 63.6%

Workforce
Metrics

• Philadelphia’s employment growth in 2022 remained • Sublease space accounts for 15% of total vacancy, with
below average as the city grappled with the lingering multiple full-building opportunities.
effects of the pandemic. Oxford Economics predicts • Free rent and tenant improvement allowances have
Philadelphia’s job growth will reach 1.3% in 2023 increased for tenants seeking more than 10,000 square
and average 0.2% from 2024 to 2027, below the U.S. feet.
average of 0.5% for the four years.
• Landlords have become more receptive to Right of First
• The regional market vacancy increased by 530 basis Refusal clauses in leases to allow tenants options for
points, to 16.9% in 2022. After decreasing at the future growth.
beginning of 2022, sublease availability reached a
historically high rate of 5.3%.
Tenant Challenges
• Overall, the region lost 855,480 square feet of
• A dependence upon public transportation and
occupancy in 2022, with the steepest loss in CBD
concerns about crime continue to drag on efforts to
Philadelphia, at over 570,000 square feet.
entice workers to return to CBD office buildings.
• Average asking rents have increased regionally to a
• Companies continue to seek higher-quality space with
new high of $31.35 per square foot. However, rates
more amenities, but these buildings typically feature
have begun to trend downward in some suburban
substantially higher rents, which is incentivizing
submarkets. Sublease space continues to be a drag on
tenants to downsize their space.
rents.
• The increasing number of buildings with loans in
special servicing may hinder renewing tenants and
impact concession and tenant improvement package
approvals for new tenants.

2023 2023-2027
ce den
-0.2% 1.3% ran i al
GDP v ib
41 43
t
en
co
em
nce
e x cit
rn
value falling
0.1% 0.2%
Population
47 47
m
optim
mis
0.7% 1.4%
ssi
ism
Spending
pe
42 47
rel ce
House Prices acc
31 42 key moment

155,864,506 (855,480) 16.9% 23.5% 5.3% 744,720 $31.35

CBD Suburban
200,000
4,000,000 20%
18%
18%
16% $36.38 Direct $29.92 Direct
3,000,000
150,000
16%
2,000,000 14%
100,000 12%
1,000,000 12%
10%
0 8%
8%
(1,000,000) 6%
4%
(50,000)
(2,000,000)
4% Vacancy Rate 16.9% 16.9% 11.2%
2%
(3,000,000)
(100,000) 0%
2018
2018 2019
2019 2020
2020 2021
2023 Top Office Markets | Philadelphia 101

Phoenix
Arizona
3.0% 1.2% 64.0%

Workforce
Metrics

• Despite showing positive signs of absorption in the • Quality sublease space in Class A buildings in
second and third quarters of the year, the market was submarkets like Tempe, Scottsdale, and Chandler
hit with multiple large move-outs in the fourth quarter, provides more options in these historically tight
the largest single quarter of negative absorption at markets.
-681,614 square feet. • Landlords realize that built-out space is in high
• Quality sublease and move-in-ready spec suites of less demand, so more spec suites are being built out in
than 15,000 square feet are seeing the most leasing, Class A buildings, creating more options for tenants.
particularly in the most desirable areas of the metro • Multiple sublease spaces have never been occupied by
area. the sublessor and include brand-new furniture, fixtures
• Large blocks of sublease space are beginning to sit on and equipment.
the market for long periods. Unfortunately, demand
is not backfilling these spaces, and more continue to Tenant Challenges
come to market.
• Construction constraints on material, labor, and
• In 2022, Phoenix job growth declined, to an annual rate supplies are prolonging tenant improvements.
of 4%, ten basis points below the U.S. rate. However,
• A lack of supply in rapidly growing submarkets like
according to Oxford Economics, job growth in the
West I-10 has limited options for tenants needing to
metropolitan area is expected to reach 1.8% in 2023
locate there.
and an average of 1.0% from 2024 to 2027, higher than
the projected U.S. rate of 0.5%. • Desirable options on smaller direct and sublease
spaces are getting multiple offers, and some tenants
miss out on their first choice.

2023 2023-2027
ce den
0.3% 1.8% ran i al
GDP v ib
25 14
t
en
co
em
nce
e x cit
rn
value falling
1.0% 1.1%
Population
19 12
m
optim
mis
1.4% 2.5%
ssi
ism
Spending
pe
15 7
rel ce
House Prices acc
55 51 key moment

164,264,772 (129,218) 14.3% 18.7% 4.4% 572,149 $32.22

CBD Suburban
4,000,000
200,000 16%
20%
3,500,000 18%
14% $28.97 Direct $34.03 Direct
150,000
12%
2,500,000
100,000 14%
10%
12%
2,000,000
50,000 8%
1,500,000
8%
6%
1,000,000
0 Current High Low
6%
500,000 4%
(50,000) 4% Vacancy Rate 14.3% 20.1% 12.1%
0 2%
(500,000)
(100,000) 0%
2018
2018 2019
2019 2020
2020 2021
2023 Top Office Markets | Phoenix 103

Pittsburgh
Pennsylvania
4.7% 0.9% 60.9%

Workforce
Metrics

• The metro area increased its vacancy rate by 160 basis • Many quality sublease options have emerged, with
points from year-end 2020, to 11.7%. However, Class A more than 35 contiguous blocks over 20,000 square
suburban vacancies fared much better, rising by only feet contiguous or greater.
67 basis points in the same time period, as the flight- • To maintain face rental rates, landlords continue
to-quality out of the urban core persists. to offer abundant free rent, increased tenant
• 2022 ended with 4,100 square feet of negative improvement allowances, and flexible early
absorption, down from the 233,800 square feet of termination options.
positive absorption in 2021 but much improved from • Because of the softness of the overall market, tenants
the 2020 figure of 861,892 square feet of negative who solicit lease proposals from competitive buildings
absorption. are better able to negotiate favorable renewal terms
• Leasing in 2022 of approximately two million square with existing landlords.
feet was consistent with 2021 totals but remained
nearly 35% below pre-COVID leasing totals. Tenant Challenges
• As with the flight-to-quality trend in most markets, 62% • Although leveling off a bit, higher construction costs
of all new office lease transactions in 2022 were for continue to cut into tenant improvement allowances.
Class A buildings, a 20% increase from 2021 figures.
• Pittsburgh is struggling to recover workers, driving
unemployment to 4%, its lowest levels since the 1970s.
• Increased costs of buildouts are exacerbated in the
Central Business District, as tenants continue to
suffer through long delays from the city on approving
construction permits.

2023 2023-2027
ce den
-0.2% 1.2% ran i al
GDP v ib
42 47
t
en
co
em
nce
e x cit
rn
value falling
-0.2% -0.1%
Population
56 55
m
optim
mis
0.9% 1.2%
ssi
ism
Spending
pe
36 52
rel ce
1.7% 2.4% ief eptan
House Prices acc
12 10 key moment

122,397,300 (4,100) 12.2% 15.1% 1.2% 688,800 $29.22

CBD Suburban
1,200,000
200,000 16%
20%
18%
14% $29.30 Direct $24.36 Direct
800,000
150,000
12%
400,000
100,000 14%
10%
12%
50,000 0 8%
8%
6%
(400,000)
0 Current High Low
6%
4%
(800,000)
(50,000) 4% Vacancy Rate 12.4% 14.0% 7.5%
2%
(1,200,000)
(100,000) 0%
2018
2018 2019
2019 2020
2020 2021
2023 Top Office Markets | Pittsburgh 105

Portland
Oregon
3.7% 0.7% 67.4%

Workforce
Metrics

• Portland grew strongly in 2022 due to a well-balanced • Sublease availability is at an all-time high, 1.5 million
economy supported by high-profile headquarters. square feet. Tenants have a wide variety of options for
Its job growth rate of 5.6% outpaced the U.S. growth shorter-term leases.
rate of 4.1% in the same period, led by restaurants, • As the flight-to-quality continues, generous concessions
manufacturing, and state and local government. Oxford and reduced rents allow tenants to lease previously
Economics projects that Portland job growth will be unaffordable premier space downtown.
2.1% in 2023 and average 0.8% in 2024 through 2027,
higher than the predicted U.S. rate of 0.5%. • Despite better availability in the suburbs than
downtown, it remains above pre-pandemic levels,
• The greater Portland market’s vacancy rate increased attracting employers who want suburban benefits, such
160 basis points from year-end 2021, to 17.9%, the as improved safety, reduced tax burdens, and better
highest for office space in the last 20 years. parking.
• Net absorption remained negative for the third
consecutive year at -1.5 million square feet. Class B Tenant Challenges
and C space accounted for 66% of 2022’s negative net
• While the primary safety concern has been the
absorption.
pandemic over the last two years, CBD homelessness is
• Rent adjustments are beginning to materialize a close second. Employees will need to feel safe before
downtown, with Class A rates falling 4.8% from year- returning to work downtown.
end 2021, accompanied by generous concessions in the
• A higher tax rate in downtown Portland has made it
form of free rent and tenant improvement allowances.
harder for companies to justify staying in the CBD.
Meanwhile, Class A rates in the suburbs grew 9.1% year-
on-year. • The impact of the Great Resignation and lingering
concerns about COVID-19 have given employees hold
a strong hand in determining worksite arrangements,
such as fully remote or hybrid schedules.

2023 2023-2027
ce den
0.6% 2.0% ran i al
GDP v ib
17 6
t
en
co
em
nce
e x cit
rn
value falling
0.9% 0.9%
Population
20 18
m
optim
mis
1.7% 2.2%
ssi
ism
Spending
pe
10 14
rel ce
House Prices acc
48 22 key moment

75,685,233 (1,499,218) 17.9% 20.1% 3.2% 403,373 $32.29

CBD Suburban
200,000
2,000,000 20%
1,500,000 18% $33.48 Direct $31.43 Direct
150,000 16%
1,000,000 $26.14 Sublease $28.98 Sublease
14%
100,000
500,000 12%
(500,000) 8%
0 Current High Low
6%
(1,000,000)
(50,000)
4% Vacancy Rate 17.9% 17.9% 9.0%
(2,000,000)
(100,000) 0%
2018
2018 2019
2019 2020
2020 2021
2023 Top Office Markets | Portland 107

Raleigh
North Carolina
3.0% 1.4% 65.7%

Workforce
Metrics

• Raleigh-Durham grew significantly in 2022, largely due • Rising sublease availabilities and vacancies give
to the expansion of its thriving tech sector, and its job tenants many options for space, in both size and lease
growth rate of 5.1% exceeded the U.S. growth rate of term.
4.1% for the same period. Oxford Economics projects • Multiple large blocks of Class A space are available,
that metro area job growth will continue at 1.5% in including new deliveries in 2023. Opportunities range
2023 and average 1.0% from 2024 through 2027, from space for corporate headquarters to short-term
higher than the predicted U.S. rate of 0.5%. leases with future flexibility.
• Sublease space maintains its upward trend in Raleigh- • Higher vacancy rates give tenants more leverage in
Durham, with nearly three million square feet, or 5.3% negotiations, as shown in flat asking rates and slightly
of total inventory. Although the vacancy rate dipped more concessions.
in the middle of 2022, it is expected to rise again in
2023.
Tenant Challenges
• Year-to-date net absorption ended 2022 positive at
• Due to the prospective economic climate, new
one million square feet, much improved from 2021’s
development starts are starting to slow down, limiting
258,099 square feet of negative net absorption; the
options for freshly delivered space.
fourth quarter was the only period of 2022 with
negative absorption. • Many tech companies in the region are still uncertain
about how much space is needed for a dynamic work
• Class A asking rates remained flat to end the year at
environment in which some workers are at home.
$32.56 per square foot, a 28.5% premium over Class
B rates. However, the market favors tenants because • The Triangle’s strong and consistent growth brings in
of rising space availabilities, and landlords must offer new tenants every year, and workers must compete
concessions to maintain current lease rates. for housing supply. The situation may be similar for
office space in the future.

2023 2023-2027
ce den
0.5% 2.0% ran i al
GDP v ib
18 5
t
en
co
em
nce
e x cit
rn
value falling
1.1% 1.1%
Population
18 13
m
optim
mis
1.3% 2.2%
ssi
ism
Spending
pe
25 15
rel ce
2.0% 2.2% ief eptan
House Prices acc
7 14 key moment

52,996,281 1,032,861 12.7% 22.3% 5.3% 2,140,643 $32.56

CBD Suburban
2,000,000
200,000 16%
20%
18%
14% $36.38 Direct $32.10 Direct
150,000
12%
100,000 14%
1,000,000 10%
12%
50,000 8%
500,000 8%
6%
0 Current High Low
6%
4%
0
(50,000) 4% Vacancy Rate 12.7% 17.5% 8.6%
2%
(500,000)
(100,000) 0%
2018
2018 2019
2019 2020
2020 2021
2023 Top Office Markets | Raleigh 109

Reno-Sparks
Nevada
2.8% 0.8% 62.5%

Workforce
Metrics

• Reno’s economy grew notably in 2022, at 1.2%, following • Much of Northern Nevada’s sublease space has been
an impressive 8.8% GDP growth in 2021. Oxford added by national and corporate tenants reevaluating
Economics projects that growth will continue, at an space needs. These satellite and regional offices can
average 1.7% per year through 2027, 0.2 percentage adjust space more easily and employ a hybrid work model.
points above the U.S. average. Employment is also • While Tesla announced a $3.6 billion expansion in
expected to grow by an average of 1.0% annually over Northern Nevada, the market has gained increased
the next five years, building on the 4.8% job count interest as a relocation option. The recent uptick in
increase in 2021 and anticipated employment growth of sublease availability could attract new occupiers who
4.2% in 2023. benefit from lower operating expenses than in their
• Marketwide vacancy improved this year, dropping current headquarters.
160 basis points year-over-year to 10.0% in the fourth • The area’s resiliency through COVID-19 has shielded
quarter of 2022. Downtown vacancy declined 320 landlords from the vacancy challenges of many primary
basis points year-over-year to 10.7%, while Suburban markets. However, with net absorption trending
vacancy dipped by 120 basis points in the same period. downward and sublease availability rising by 23.1%,
• Net absorption began to slow toward the end of the owners may shift to a more tenant-centric approach in
year as both direct and sublet space continued to negotiations.
hit the market. While tenant demand has remained
healthy over the past year and a half, growing sublease Tenant Challenges
availability could be an obstacle in the year ahead.
• Much of the new sublease space in the market is in large
• Although average direct asking rents were up 4.2% in blocks, which are more difficult for local tenants to backfill.
2022, the market cooled off by one cent to $1.92 per
• The market has maintained high demand for Class
month, or $23.04 per square foot full-service gross in
A space; however, the outlook for new speculative
the fourth quarter. Downtown rents remained largely
construction is unlikely.
unchanged this year, dipping by a penny to $2.07 since
2021. Suburban rents grew by 18 cents in the same • Although ample sublease availability provides highly
period, to $1.87 per square foot per month. sought-after Class A space, most subleases are large
blocks. Owners are not inclined to reconfigure building
floor plans until current leases expire.

2023 2023-2027
ce den
0.4% 1.7% ran i al
GDP v ib
22 23
t
en
co
em
nce
e x cit
rn
value falling
1.3% 1.2%
Population
9 9
m
optim
mis
1.0% 2.1%
ssi
ism
Spending
pe
32 17
rel ce
House Prices acc
58 53 key moment

7,774,799 128,026 10.0% 13.4% 3.1% 80,505 $27.36

CBD Suburban
200,000 20%
16%
18%
14%
150,000
12%
100,000 14%
10%
12%
50,000 8%
8%
6%
0 Current High Low
6%
4%
(50,000) 4% Vacancy Rate 10.0% 13.3% 3.3%
2%
(100,000) 0%
2018 2019 2020 2021 2022
2023 Top Office Markets | Reno-Sparks 111

Richmond
Virgina
3.1% 0.8% 62.5%

Workforce
Metrics

• Richmond’s economy has been challenged to diversify • At a near 21% availability rate, tenants have an ample
from its manufacturing roots. In 2022, its job growth supply of available inventory.
rate of 2.1% fell behind the U.S. rate of 4.1%. Oxford • Landlords have hesitated to push rates aggressively,
Economics forecasts metro area job growth of 1.6% in keeping overall occupancy costs on renewal in line with
2023 and an average rate of 0.5% from 2024 through those of previous years.
2027, consistent with the U.S. rate. As of Q1 2022,
Richmond’s job count remained 0.8% below its peak in • Tenants are getting more concession packages, namely
Q1 2020, but it is expected to fully recover its lost jobs free rent and tenant improvement allowances.
by Q3 2024.
Tenant Challenges
• The metro area vacancy rate increased by 94 basis
points from year-end 2021, to 12.2%, while the • Rising tenant improvement and moving costs are
availability rate grew 150 basis points year-over-year, prohibiting relocations for some and making renewals
to 20.8%. Class A overall vacancies fared much better more likely.
than Class B and decreased by 26 basis points as Class • Tenants are favoring subleases and renewals and
B vacancies increased by 219 basis points, signifying seeking cooperation with landlords on extensions.
flight-to-quality trends.
• With the rise of remote and hybrid work, tenants
• Leasing increased slightly over the quarter, by nearly struggle to calculate their headcount and space needs.
300,000 square feet. However, 2022 leasing velocity at
almost one million square feet was 34% lower than in
2021.
• Landlords held asking rates firm but continued to offer
generous concessions in the form of free rent and
improvement allowances. The overall full-service rate
ended the year at $21.51 per square foot. Midtown
rates, at $21.01, grew 6.0% over the quarter.

2023 2023-2027
ce den
0.0% 1.7% ran i al
GDP v ib
32 23
t
en
co
em
nce
e x cit
rn
value falling
0.6% 1.2%
Population
31 9
m
optim
mis
1.2% 2.1%
ssi
ism
Spending
pe
29 17
rel ce
House Prices acc
28 53 key moment

26,075,768 (60,524) 12.2% 20.8% 2.5% 0 $22.75

CBD Suburban
300,000
200,000 14%
20%
18%
12%
200,000
150,000
10%
14%
100,000
12%
8%
0
6%
8%
(100,000)
0 Current High Low
6%
4%
(200,000)
(50,000) 4%
2%
Vacancy Rate 12.2% 17.5% 8.7%
(300,000)
(100,000) 0%
2018 2019 2020 2021 2022
2023 Top Office Markets | Richmond 113

Sacramento
California
4.1% 0.4% 58.8%

Workforce
Metrics

• Sacramento’s economy fared relatively better than • The regional availability rate of 21.7% in Q4 2022 is up
some of its coastal counterparts during the pandemic, 720 basis points since Q1 2020. Tenants have many
but its growth wasn’t as strong in 2022. Its job growth lease options across the region, with 18 Class A and B
rate of 4.4% surpassed the U.S. growth rate of 4.1%. buildings with 100,000 square feet or more available
However, between Q1 2020 and Q4 2022, total space.
employment in the region increased by 2.5%, more • There is much more Class A space on the market,
than twice the average net growth rate of the U.S. allowing tenants to relocate to higher-quality space.
Oxford Economics projects job growth of 1.2% in 2023 The regional Class A availability rate of 22.4% in Q4
and an average rate of 0.6% between 2024 and 2027. 2022 jumped 340 basis points year-over-year.
• The regional vacancy rate has risen to its highest point • Landlords are offering generous tenant improvement
in nine years, to 18.7%, a 670- basis-point increase allowances and free rent concessions to entice tenants.
since Q1 2020. Highway 50 East’s vacancy rate of
31.3% is also at an all-time high, with 22 buildings in
Tenant Challenges
the submarket now with at least 50,000 square feet
available. • Tenants continue to grapple with how much space they
need in a post-pandemic environment — though many
• Q4 2022’s net absorption of -683,521 square feet was
are downsizing considerably or going fully remote,
the highest quarterly occupancy loss on record. Annual
others need more space.
net absorption fell to -1,393,927 square feet, similar to
2021’s absorption total. More than 3.6 million square • The necessity of having a Downtown office is being
feet of vacant space has been added since Q2 2020. debated by tenants as cost-cutting measures are
implemented.
• Regional average asking rents were flat during Q4
2022 at an all-time high of $25.80 per square foot full- • Tenants attempting to make long-term lease decisions
service. Downtown Class A asking rents have shown struggle with new space layouts and how to navigate a
little movement recently, increasing only 1.2% since Q4 proper return-to-office requirement for employees.
2019, to $40.92 per square foot in Q4 2022.

2023 2023-2027
ce den
0.8% 1.6% ran i al
GDP v ib
10 29
t
en
co
em
nce
e x cit
rn
value falling
0.2% 0.4%
Population
41 38
m
optim
mis
0.9% 18.0%
ssi
ism
Spending
pe
35 33
rel ce
House Prices acc
53 30 key moment

57,673,081 (1,393,927) 18.7% 21.7% 1.7% 20,000 $25.80

CBD Suburban
1,000,000
200,000 20%
18% $40.92 Direct $27.60 Direct
500,000
150,000 16%
$33.84 Sublease $20.04 Sublease
14%
100,000 0
12%
(500,000)
8%
(1,000,000)
0 Current High Low
6%
(1,500,000)
(50,000)
4% Vacancy Rate 18.7% 22.3% 12.0%
(2,000,000)
(100,000) 0%
2018
2018 2019
2019 2020
2020 2021
2023 Top Office Markets | Sacramento 115

Salt Lake City
Utah
2.1% 0.6% 71.5%

Workforce
Metrics

• Salt Lake City rebounded from the pandemic faster • At 4.9%, sublease availability is at an all-time high,
than any other top 50 metro area, with a net job offering multiple space options with shorter lease
growth of 4.5% between Q1 2020 and Q4 2022, terms and discounted lease rates.
compared to the national rate of 1.1%. However, its • Tenants now have a wide selection of large contiguous
growth rate slowed in 2022 and was lower than that blocks of space to choose from in Class A buildings,
of many of its tech-driven peers, with growth of 3% with a handful of new construction options.
trailing the U.S. average of 4.1%. Oxford Economics
predicts Salt Lake City job growth of 0.8% in 2023 and • Tenants will be able to execute short-term leases for
an average rate of 0.9% from 2024 to 2027, surpassing better future flexibility.
the U.S. forecasted rate of 0.5%.
Tenant Challenges
• Construction numbers continue to decrease, with
626,552 square feet under construction, compared to • With Utah’s unemployment rate at around 2%, it is
1,424,120 square feet in the fourth quarter of 2021. hard to find employees willing to occupy the space
tenants are paying for, since so many want to work at
• Class A rates are still skyrocketing, to a new record high
home.
of $31.71 per square foot full-service. Buildings in the
CBD, Periphery and Sugarhouse submarkets feature • The area will continue to see a talent exodus due to its
the highest rates. high cost of living and the popularity of remote work.
• Overall vacancy slightly increased from 12.7% in the • As construction costs and vacancy continue to rise,
third quarter to 13.1% at year-end. The most significant developers are cautious about starting new ground-up
vacancies are in the Airport/Intl, South West Valley, and construction projects.
West Valley/Lake Park submarkets, at over 19% vacant.

2023 2023-2027
ce den
-0.1% 1.6% ran i al
GDP v ib
36 27
t
en
co
em
nce
e x cit
rn
value falling
1.6% 1.3%
Population
4 7
m
optim
mis
1.4% 2.4%
ssi
ism
Spending
pe
16 11
rel ce
House Prices acc
38 28 key moment

42,067,393 536,787 13.2% 15.3% 4.9% 626,552 $31.71

CBD Suburban
1,800,000
200,000 14%
20%
1,600,000 18% $29.63 Direct $25.49 Direct
150,000 12%
10%
14%
1,200,000
100,000
12%
8%
1,000,000
800,000 6%
8%
600,000
0 Current High Low
6%
4%
400,000
(50,000) 4% Vacancy Rate 13.2% 15.2% 7.6%
200,000 2%
(100,000)0 0%
2018
2018 2019
2019 2020
2020 2021
2023 Top Office Markets | Salt Lake City 117

San Diego
California
3.9% 0.4% 60.3%

Workforce
Metrics

• San Diego had strong growth in 2022, with the return • At 1.1%, sublease vacancy is at its highest level in
of tourists and continued investment in its life sciences two years, providing numerous under-market rent
firms. The metro area’s annual job growth rate of 5.5% opportunities for some tenants seeking high-value and
exceeded the U.S. growth rate of 4.1% last year, and often turn-key spaces.
Oxford Economics anticipates San Diego job growth at • A slowdown in office-to-life-science conversions will
1.5% in 2023 and an annual average of 0.6% between retain some properties available for lease to office
2024 and 2027, higher than the U.S. forecasted rate of tenants.
0.5%.
• Nominally, rents continue to grow, but very slowly. In
• San Diego County office vacancies across all classes real terms, rents have effectively decreased compared
averaged 12.4% at the end of the year, and Class A to the growth of other costs associated with and due to
vacancy decreased 32 basis points, to 15.6%. The inflation.
suburban markets posted an overall vacancy of 10.3%,
while the Downtown/CBD stood at 26.3%, the highest
Tenant Challenges
submarket vacancy in the county.
• New construction continues to diminish, constraining
• San Diego County office net absorption totaled 143,033
future supply, and little land remains for ground-up
square feet in the fourth quarter, bringing 2022 net
office construction. Even if demand continues to be
absorption to 862,649 square feet — the highest
mildly positive, it will continue to compress vacancy
demand in any year since 2016. Class A’s was the most
rates.
significant, with 171,020 square feet of net absorption
in the fourth quarter, bringing the total to 437,064 • The increase in remote working will reduce space
square feet for the year. demand for some companies, which could translate
into increasing sublease vacancy in the near- to mid-
• San Diego County average asking rents began dipping
term.
slightly in the first nine months of 2022 but increased
somewhat at year-end. The full-service average asking • Housing prices and a generally high cost of living in
rents for all office classes combined was $36.60 per San Diego County may discourage some companies
square foot, a 1% increase for the year. The Class A from relocating from out-of-state. However, San Diego
average dipped by 1.1% for the year, at $42.60 per remains more affordable than Greater Los Angeles, the
square foot. San Francisco Bay Area, and Silicon Valley.

2023 2023-2027
ce den
0.9% 1.7% ran i al
GDP v ib
9 20
t
en
co
em
nce
e x cit
rn
value falling
0.5% 0.5%
Population
36 37
m
optim
mis
1.3% 1.9%
ssi
ism
Spending
pe
22 25
rel ce
House Prices acc
47 12 key moment

82,790,652 862,649 12.4% 16.7% 2.7% 1,095,178 $42.60

CBD Suburban
2,000,000
200,000 14%
20%
1,500,000 18%
12%
150,000
1,000,000
10%
14%
100,000
500,000
12%
8%
6%
(500,000) 8%
0 Current High Low
6%
4%
(1,000,000)
(50,000) 4%
2%
Vacancy Rate 12.4% 17.8% 9.2%
(1,500,000)
(2,000,000)
(100,000) 0%
2018
2018 2019
2019 2020
2020 2021
2023 Top Office Markets | San Diego 119

San Francisco
California
3.3% 1.2% 66.8%

Workforce
Metrics

• San Francisco had moderate growth in its tech sector • Vacancies at an all-time high have opened up
and a slight increase in tourism in 2022. Its job growth opportunities in trophy assets that may not have been
rate of 5.8% outpaced the national rate of 4.1% last part of the discussion in prior years.
year, led by growth in the tech industry, restaurants, • Sublease availability is at an all-time high, including an
and other services. Oxford Economics projects San abundance of highly improved, quality plug-and-play
Francisco job growth rate of 3.1% in 2023 and an space.
average of 0.8% from 2024 to 2027, surpassing the
anticipated U.S. rate of 0.5%. • Tenant concessions of free rent and improvement
allowances have increased significantly during the
• The fourth quarter of 2022 registered negative 800,000 pandemic.
square feet of net absorption. The North Financial
District was the greatest contributor at 415,000 square
Tenant Challenges
feet negative, driven by tech and professional services
downsizing. • San Francisco has lagged behind other major markets
in regard to workers returning to the office, so tenants
• Effective rents grew a modest 4% quarter-over-quarter
have had to spend on quality space to entice workers
and are expected to plateau in the coming months
back.
as landlords reposition assets to navigate historically
high vacancy and availability. Tenant concessions are • Lower leasing volume means that tenants offering
expected to increase to solve vacancy issues. subleases face heavy competition from other
sublessors and quality direct availabilities from
• The general uncertainty in the San Francisco leasing
landlords.
market continues to greatly impact office sales.
Because of rising interest rates and difficulty borrowing • Public transit has yet to recover fully, and tenants off
for office investments, the San Francisco market had transit routes face hurdles to getting workers to return
only three closed-office transactions during Q4 2022. to the office.

2023 2023-2027
ce den
2.1% 2.4% ran i al
GDP v ib
2 3
t
en
co
em
nce
e x cit
rn
value falling
1.1% 0.6%
Population
15 31
m
optim
mis
2.7% 2.5%
ssi
ism
Spending
pe
2 8
rel ce
House Prices acc
54 39 key moment

98,123,460 (4,254,990) 22.2% 28.4% 8.9% 834,100 $84.83

CBD Suburban
6,000,000
200,000 25%
20%
18% $81.84 Direct $68.61 Direct
4,000,000
150,000 20%
2,000,000
100,000 14%
15%
12%
10%
8%
(2,000,000)
0 Current High Low
6%
(4,000,000)
(50,000)
5%
4% Vacancy Rate 22.2% 4.5% 22.2%
(6,000,000)
(100,000) 0%
2018
2018 2019
2019 2020
2020 2021
2023 Top Office Markets | San Francisco 121

San Jose
California
2.8% 1.3% 68.5%

Workforce
Metrics
Market Overview and Mountain View continue to demand the highest

rents, averaging $8.72 per square foot per month and
• Despite concerns about possible tech layoffs, San Jose
$8.62, full-service, respectively. However, rents will be
had strong growth in 2022, with an annual job growth
pushed down as demand slows and tenants become
rate of 5.6%, surpassing the U.S. growth rate of 4.1%
more selective about new space or decide to renew
for the same period. Growth was primarily driven
while anticipating economic headwinds.
by the restaurant, tech, and manufacturing sectors.
Oxford Economics expects San Jose will continue its
strong job growth, at a predicted rate of 2.8% in 2023
Tenant Opportunities
and an average of 0.8% from 2024 to 2027, higher than • Rampant layoffs in the tech industry could motivate
the projected average U.S. rate of 0.5%. employees to return to the office for more face time.
• Silicon Valley vacancy ticked up 50 basis points in the • Landlords who were reluctant to reduce large blocks
fourth quarter, to 11.0%. Downtown San Jose’s vacancy of space, such as at Santana West, are now more
is still in recovery from the pandemic at 16.3%, up 30 accommodating to smaller users.
basis points quarter-over-quarter. Unemployment • Tenants looking to expand will have more negotiating
continues to be below the national average, and the power over rents and concessions as landlords
GDP in San Jose remains strong. While layoffs were anticipate a slowdown.
abundant in the fourth quarter, many companies
announcing layoffs will have a larger workforce than
Tenant Challenges
before the pandemic hiring surge, despite the job cuts.
• With hybrid schedules becoming the norm, companies
• The South Bay recorded 139,561 square feet of negative
must assess space needs and what kind of space will
net absorption, coupled with large sublease vacancies
foster more collaboration and productivity.
on the market as companies continue to cut space
and headcount. Class A space had net expansion in • Many employees may have moved further from the
the fourth quarter, 107,973 square feet of positive net office than before the pandemic, making it more
absorption; however, the market is slowing compared to important for the office to be centralized.
the over 1.3 million square feet of growth in Q4 2021. • Existing tenant spaces will need to be reconfigured to
• Asking rents stabilized at $5.30 per square foot per accommodate more all-hands areas, designated areas
month full-service in Silicon Valley; however, Class A for collaboration or heads-down focus, and amenities
rents dropped $0.01 to $5.66 per month, or $67.92 per for health, such as green spaces, outdoor workplaces,
square foot per year. Premier markets such as Palo Alto and proximity to restaurants or cafeterias.

2023 2023-2027
ce den
2.6% 3.3% ran i al
GDP v ib
1 1
t
en
co
em
nce
e x cit
rn
value falling
1.1% 0.6%
Population
11 32
m
optim
mis
2.6% 2.6%
ssi
ism
Spending
pe
1 3
rel ce
House Prices acc
52 23 key moment

119,995,190 1,797,279 11.0% 16.2% 4.2% 7,598,819 $67.92

CBD Suburban
7,000,000
200,000 12%
20%
6,000,000 18% $62.64 Direct $67.92 Direct
150,000 10%
4,000,000
100,000 14%
8%
12%
3,000,000
50,000 6%
2,000,000
8%
1,000,000
6%
0
(50,000) 4%
2% Vacancy Rate 11.0% 20.0% 5.2%
(2,000,000)
(100,000) 0%
2018
2018 2019
2019 2020
2020 2021
2023 Top Office Markets | San Jose 123

Seattle
Washington
3.4% 1.1% 68.6%

Workforce
Metrics

• Seattle’s aerospace sector is finally on the path to • Tenants of all sizes seeking space will find many options.
recovery, but the city still faces several challenges, While Class A space still commands a high price,
including tech layoffs. In 2022, Seattle’s job growth incentives can make the transactions more lucrative.
rate of 5.0% exceeded the national growth rate of • One successful area of negotiations has been shorter
4.1%, mainly driven by the tech sector and restaurants. lease terms. The rise of shared offices and coworking
Despite this, Seattle only recently recovered the jobs in the last economic cycle were popular because
lost during the pandemic, at a net job change of 0.5% companies wanted shorter commitments. This is
from Q1 2020 to Q4 2022, below the national net growth becoming a negotiating point of some leases, often at
of 1.1%. Seattle’s predicted job growth is 2.0% in 2023 the expense of tenant improvement allowances, which
and an average of 0.9% from 2024 through 2027, higher require longer leases to make economic sense to the
than the predicted US rate of 0.5%. landlord.
• The Seattle metro area’s vacancy rate increased from • While rents are not letting up in Class A space, Class B, C,
14.7% at the end of 2021 to 15.5% by 2022 without and historic buildings allow startups to find less expensive
significant new demand to take spaces off the market. space that previously wouldn’t have been feasible.
Even more stark is the direct vacancy in Seattle CBD,
17.5%, along with 7.3% of sublease availability.
Tenant Challenges
• Over 7.5 million square feet of office space is under
• In an uncertain economic environment, some tenants
construction, primarily in Bellevue CBD, where it is
struggle to decide about their leasing needs and, even
82% pre-leased compared to 25% pre-leasing in the
more, to agree with landlords about where the market is.
downtown Seattle area.
• Unlike suburban submarkets, downtown Seattle has
• The flight-to-quality has kept landlords optimistic about
had safety issues because of fewer office workers
Class A buildings, so average direct asking rents have
over the last three years. Some workers don’t feel safe
remained in the low $50s throughout the market, with
returning to their physical offices.
Bellevue CBD the highest at $66.44 per square foot
per year and Seattle CBD not far behind at $57.48 per • A mix of in-person and virtual meeting formats
square foot per year. stemming from hybrid work schedules has challenged
companies hoping to encourage employees back to the
office to collaborate. New office arrangements for this
way of working still need to be worked through.

2023 2023-2027
ce den
1.8% 2.5% ran i al
GDP v ib
3 2
t
en
co
em
nce
e x cit
rn
value falling
1.4% 1.2%
Population
7 8
m
optim
mis
2.1% 2.6%
ssi
ism
Spending
pe
4 4
rel ce
House Prices acc
49 18 key moment

132,444,773 (70,070) 15.5% 20.3% 4.9% 7,537,463 $52.89

CBD Suburban
5,000,000
200,000 18%
20%
4,000,000 18%
16% $57.48 Direct $42.60 Direct
150,000
16%
3,000,000
100,000 14%
12%
2,000,000
12%
10%
1,000,000
8%
0 8%
6%
(1,000,000) 4%
(50,000) 4% Vacancy Rate 15.5% 16.9% 8.5%
(2,000,000) 2%
(3,000,000)
(100,000) 0%
2018
2018 2019
2019 2020
2020 2021
2023 Top Office Markets | Seattle 125

St. Louis
Missouri
3.4% 0.5% 65.8%

Workforce
Metrics

• St. Louis, like many Midwestern cities, had sluggish • With more tenants electing to reduce space, as the
growth in 2022, with annual job growth of 2.1%, which hybrid working model looks here to stay, conditions
lagged behind the U.S. rate by two percentage points. will remain favorable for occupiers, who have many
Oxford Economics projections indicate that St. Louis’s office space options, including many sublease spaces.
modest job growth will continue, at a 1.1% in 2023 • Tenants now can choose among large contiguous
and an average of 0.2% per year from 2024 to 2027. blocks of space in Class A buildings. Several major
Despite some recovery, the metro’s total employment companies vacated large blocks of Class A, adding to
remains 1.1% below its pre-pandemic level in Q1 2020, the rising sublease inventory.
and full recovery is not expected until the end of 2024.
• The metro area is expected to continue to see higher-
• In the second quarter of 2022, vacancies set a new than-average vacancy rates in 2023, and high-credit
record, reaching 20.7%. During the last half of the tenants will be offered generous concessions.
year, the rate declined 90 basis points, to 19.8%. Since
the start of 2021, the rate has increased by 210 basis
Tenant Challenges
points.
• Despite the trend of working from home and vacancy
• Strong leasing prevailed throughout the year totaling
growth, local landlords have held firm on rates. The
nearly two million square feet, close to pre-pandemic
average direct asking rent was $22.45 per square foot
levels of 2.3 million square feet in 2019. More than
at year-end, up from $22.17 one year ago.
530,000 square feet were leased in the final quarter
of the year, helping to boost absorption into positive • The development pipeline has run dry, so tenants
territory for the first time since Q4 2019, right before seeking newer, highly amenitized buildings will need to
the pandemic hit. look at the existing inventory.
• The average Class A direct asking rent finished the year • As in other Midwest cities, a lack of substantial
at $22.45 per square foot, up from $22.17 one year ago. population growth will continue to make it difficult to
find new employees.

2023 2023-2027
ce den
-0.7% 1.0% ran i al
GDP v ib
56 55
t
en
co
em
nce
e x cit
rn
value falling
-0.2% -0.1%
Population
53 53
m
optim
mis
0.4% 1.2%
ssi
ism
Spending
pe
50 54
rel ce
2.0% 2.3% ief eptan
House Prices acc
9 11 key moment

53,837,231 (1,000,877) 19.8% 15.6% 4.2% 917,585 $24.64

CBD Suburban
1,500,000
200,000 25%
20%
18% $19.43 Direct $27.12 Direct
1,000,000
150,000 20%
500,000
100,000 14%
15%
12%
10%
8%
(500,000)
0 Current High Low
6%
(1,000,000)
(50,000)
5%
4% Vacancy Rate 19.8% 20.7% 12.0%
(1,500,000)
(100,000) 0%
2018
2018 2019
2019 2020
2020 2021
2023 Top Office Markets | St. Louis 127

Stockton
California
5.9% 0.2% 56.6%

Workforce
Metrics

• Despite positive growth in 2021, the Stockton economy • Lease rates had retreated more than 13% since year-
is estimated to have contracted by 0.5% in 2022. end 2020, when rates were $28.92 per square foot per
Oxford Economics projects a modest growth rate of year.
0.1% in GDP for 2023, and an average annual growth • Tenants are seeking quality properties with ample
rate of 1.4% through 2027, slightly below the 1.5% amenities to attract and retain top talent.
national rate. Over the next five years, employment is
expected to grow by an average of 0.6% annually, after • High build-out costs and construction delays make
an expected employment growth rate of 3.8% in 2022. ready-to-go spec suites favorable for tenants.
• The San Joaquin County office market vacancy

Tenant Challenges
increased by 70 basis points in the fourth quarter of
2022, to 8.8%. • As budgets bind owners and construction costs
remain elevated, tenants pay more for their tenant
• In the Q4 2022 San Joaquin County totaled 52,996
improvements.
square feet of negative net absorption, with year-to-
date totaling 9,869 square feet. • Unlike other markets, the San Joaquin County office
market has a shortage of sublease space.
• Sales volume for the county totaled $13.7 million in
nine transactions at an average price of $195 per • Tenants have had to reevaluate space needs to
square foot. balance work-from-home strategies with creating a
collaborative office environment.

2023 2023-2027
ce den
0.1% 1.5% ran i al
GDP v ib
30 35
t
en
co
em
nce
e x cit
rn
value falling
0.9% 0.8%
Population
23 23
m
optim
mis
0.7% 1.7%
ssi
ism
Spending
pe
41 37
rel ce
House Prices acc
59 37 key moment

7,585,546 (52,996) 8.8% 8.8% 0.0% 0 $25.08

CBD Suburban
250,000
200,000 10%
20%
200,000
9%
18% $25.08 Direct – Direct
150,000 8%
16% $25.80 Sublease – Sublease
150,000 7%
14%
100,000
100,000 6%
12%
50,000 5%
50,000 4%
8%
0 Current High Low
0 3%
6%
(50,000)
(50,000)
2%
4% Vacancy Rate 8.8% 20.3% 7.1%
1%
(100,000) 0%
2018 2019 2020 2021 2022
2023 Top Office Markets | Stockton 129

Tampa
Florida
2.8% 0.7% 61.1%

Workforce
Metrics

• Tampa’s economy has had robust growth in recent • At 5.0%, sublease availability is at an all-time high,
years thanks to diverse industries. In 2022, its job allowing many options for a short-term lease. These
growth rate of 4.7% surpassed the U.S. average of sublease spaces are also available for tenants looking
4.1%, primarily driven by the restaurant, retail trade, for a quick start-up, as many availabilities are turn-key.
and finance and insurance sectors. Oxford Economics • Tenants now have a wide selection of large contiguous
projects steady job growth, at a predicted rate of 1.1% blocks of space in Class A buildings, but blocks above
in 2023 and an average 0.5% per year from 2024 to 100,000 square feet are commanding a premium, with
2027, equal to the U.S. rate. rates between $32–$46 per square foot.
• The metro area market stabilized in 2022, with vacancy • Tenants relocating to the Tampa Bay market continued
rate peaking at 14.5% in the third quarter, then to execute short-term leases, often in sublease space,
declining at year-end for the first time in nine quarters, looking at future growth in the area.
to 14.0%, a drop of 50 basis points year-over-year.
The vacancy decrease was due to the CBD submarket,
Tenant Challenges
where an uptick in leasing pushed the rate down to
10.1%, a decline of 560 basis points from last year. • Tenants are challenged by their build-out
configuration, looking for efficiency, flexibility, and
• After four quarters of negative absorption, the area
collaborative space while accommodating remote
had an uptick of 390,000 square feet amid steady
working.
leasing throughout the year. Most of the space leased
during the quarter was Class A in the CBD. • Some sublease tenants in the downtown submarket
find parking availability and affordability challenging.
• Landlords and tenants are on an equal footing,
although landlords have offered some concessions • With just 75,000 square feet added in the last two
for deals. The overall full-service rate ended the year years, newer amenitized buildings are less available.
at $28.92 per square foot, a 7.0% increase over 2019
rates.

2023 2023-2027
ce den
0.0% 1.6% ran i al
GDP v ib
33 31
t
en
co
em
nce
e x cit
rn
value falling
0.8% 0.9%
Population
26 22
m
optim
mis
0.6% 1.8%
ssi
ism
Spending
pe
45 30
rel ce
House Prices acc
40 49 key moment

69,707,375 482,410 14.0% 18.6% 5.0% 30,321 $31.13

CBD Suburban
400,000
200,000 16%
20%
300,000 18%
14% $36.46 Direct $31.18 Direct
150,000
200,000 12%
100,000 14%
100,000 10%
12%
0
50,000 8%
(100,000) 8%
6%
0 Current High Low
6%
(200,000) 4%
(50,000) 4% Vacancy Rate 14.0% 19.9% 7.2%
(300,000) 2%
(400,000)
(100,000) 0%
2018 2019 2020 2021 2022
2023 Top Office Markets | Tampa 131

Washington
District of Columbia
3.6% 0.5% 68.4%

Workforce
Metrics

• Washington, D.C.’s economy continues to struggle • Tenants with a strong understanding of future space
with the effects of remote work and a lack of tourism. needs will find some of the best deal terms in the
Although the area had job growth of 3.1% in 2022, it market, with concessions at all-time highs.
fell short of the national average of 4.1% for the same • The flexibility in the market has expanded considerably
period. It’s forecasted that the metro will only see a over the last two years, as most buildings have added
job growth rate of 1.4% in 2023 and an average rate extensive spec suites to allow for quick move-ins with
of 0.5% between 2024 and 2027, equal to the U.S. rate shorter deal terms.
over the same four-year period.
• While the addition of sublet space to the market has
• The metro D.C. area vacancy decreased by ten basis leveled off over the last few quarters, there is still a
points from the third quarter, to 18.2% to end the year. considerable amount, with various term options from
However, year-over-year vacancy increased by 80 basis 12 months to five-plus years.
points.
• For the eleventh straight quarter, net absorption for Tenant Challenges
the region was negative, bringing the total since the
• The uncertainty in the market continues to make long-
start of the pandemic to negative 11.2 million square
term strategic decisions challenging as space needs are
feet.
still in flux.
• While the overall asking rate for the region has
• Lead times for construction buildouts are still difficult
remained largely unchanged over the past several
to gauge, making quick turnaround tough for some
quarters, concessions have remained at historically
design features.
high levels to attract the limited supply of high-credit
tenants looking for space. • The growing number of landlords facing debt
maturities has made it more complicated to complete
deals.

2023 2023-2027
ce den
0.3% 1.3% ran i al
GDP v ib
23 42
t
en
co
em
nce
e x cit
rn
value falling
0.7% 0.7%
Population
29 24
m
optim
mis
1.3% 1.8%
ssi
ism
Spending
pe
23 31
rel ce
House Prices acc
51 55 key moment

435,319,898 (1,784,003) 18.2% 20.2% 2.4% 5,273,154 $45.42

CBD Suburban
200,000
8,000,000 20%
18% $59.67 Direct $35.23 Direct
6,000,000
4,000,000 14%
100,000
2,000,000 12%
0 8%
0 Current High Low
(2,000,000) 6%
(50,000)
(4,000,000)
4% Vacancy Rate 18.2% 18.3% 8.6%
(6,000,000)
(100,000) 0%
2018
2018 2019
2019 2020
2020 2021
2023 Top Office Markets | Washington D.C. 133

Methodology & Sources
Overview Data
Unemployment & Workforce Participation Rates
Provided by Oxford Economics.
2023-2027 Office Job Growth
Calculated compound annual growth rate from data provided by Oxford Economics looking at office service sector jobs only.
Rankings
2023 GDP Employment, Population, Spending and House Price Growth & Rank
The top 59 office markets based on total inventory were ranked by evaluating their 2023 growth rates amongst each
other. Data provided by Oxford Economics.
2023-2027 GDP Employment, Population, Spending and House Price Growth & Rank
The top 59 office markets based on total inventory were ranked by evaluating their calculated compound annual
growth rate between 2023-2027. Data provided by Oxford Economics.
All real estate information was provided by Colliers Research and Analytics and was gathered from multiple sources deemed
to be reliable.
Information contained within this report may contain errors or omissions and is presented without any warranty or
representations as to its accuracy or reliability.

2023 Top Office Markets | Methodology & Sources 135
colliers.com
This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations
or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any
interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied
terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. This publication is the copyrighted
property of Colliers International and/or its licensor(s). ©2023. All rights reserved.

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U.S.

Research Report | March 2023

U.S. Office Markets:

Office Services Occupier Services Research

2 Colliers U.S. Research Report

2023 Top Office Markets | Introduction 3

4 Colliers U.S. Research Report

U.S. Office Market: Supply, Demand & Vacancy

Absorption (MSF) New Supply (MSF) Vacancy Rate (%)

In our national survey, 43% of the metro office markets

2023 Top Office Markets | Overview 5

U.S. Office Market: Available Sublease Space

U.S. Office Market: Quarterly Under Construction Totals

Under Construction Historic Average

6 Colliers U.S. Research Report

Top 10 Office Markets: • The U.S. office market remains

0% 10% 20% 30% 40% 50%

2023 Top Office Markets | Overview 7

But the labor market remains remarkedly resilient,

8 Colliers U.S. Research Report

-5% 0% 5% 10% 15% 20% 25%

Source: Oxford Economics

2023 Top Office Markets | Overview 9

Projected Metro GDP Growth: 2023

10 Colliers U.S. Research Report

2023 Top Office Markets | Overview 11

Market Cycle | Year-end 2023 Forecast

Rental value of supply and

Rental value Rental value

Portland, San Francisco, Seattle

Atlanta, Austin, Cincinnati, Cleveland,

Baltimore, Birmingham, Boston, Charlotte,

12 Colliers U.S. Research Report

In this report, we ranked each city on a scale of one to Home Prices

2023 Top Office Markets | Overview 13

Albuquerque -0.5% 49 0.6% 57 0.0% 48 0.2% 54 0.2% 21

Atlanta 0.3% 24 1.2% 38 1.2% 10 1.8% 9 0.2% 20

Austin 1.3% 5 2.6% 3 1.8% 2 2.4% 3 -0.8% 30

Baltimore 0.2% 26 1.5% 24 -0.1% 50 0.5% 48 -4.4% 50

Birmingham 0.0% 35 0.9% 49 0.3% 39 0.5% 49 3.9% 1

Boise 0.4% 20 1.2% 35 2.2% 1 1.7% 11 -4.0% 46

Boston 1.0% 8 1.3% 31 0.9% 22 1.9% 5 -2.7% 41

Charleston -0.2% 39 2.0% 8 0.7% 28 1.4% 20 0.1% 22

Charlotte 0.2% 27 2.4% 4 1.4% 6 1.9% 6 3.2% 2

Chicago -0.6% 54 0.6% 58 -0.2% 55 0.2% 55 -0.2% 25

Cincinnati -0.5% 53 1.3% 30 0.2% 44 0.8% 39 1.8% 11

Cleveland -0.7% 57 1.0% 47 -0.3% 58 0.2% 53 2.0% 8

Columbia 0.1% 31 1.6% 18 -0.1% 51 0.8% 38 3.2% 4

Columbus -0.2% 37 1.2% 40 0.8% 25 1.1% 30 1.5% 15

Dallas-Ft. Worth 0.7% 13 1.4% 27 1.3% 8 1.4% 21 -0.3% 26

Dayton -0.6% 55 0.8% 55 -0.3% 57 0.0% 58 1.0% 16

Denver 0.7% 15 1.2% 36 1.1% 14 1.6% 13 -2.9% 43

Detroit -0.4% 48 1.6% 21 0.0% 49 1.0% 31 -0.1% 24

Fort Lauderdale -0.2% 38 0.6% 56 0.5% 33 0.6% 46 -2.0% 37

Grand Rapids -0.3% 43 1.7% 16 0.5% 32 1.5% 14 1.9% 10

Greenville-Spartanburg -0.2% 40 1.0% 46 0.4% 38 0.9% 34 3.2% 3

Hartford -1.2% 59 1.2% 41 -0.4% 59 0.6% 44 -1.9% 35

Houston 1.4% 4 1.7% 15 1.5% 5 1.9% 8 1.5% 13

Indianapolis -0.3% 45 0.9% 50 0.4% 37 0.8% 40 2.3% 5

Jacksonville 0.4% 19 0.9% 51 1.1% 16 0.7% 43 -0.9% 32

Kansas City -0.4% 47 1.1% 45 0.5% 35 0.8% 37 0.6% 17

Las Vegas 1.2% 6 2.3% 5 0.7% 27 1.2% 28 -8.0% 57

Los Angeles 1.0% 7 1.7% 14 0.2% 43 1.2% 27 -3.1% 45

Memphis -0.4% 46 1.2% 37 0.1% 46 0.5% 47 1.5% 14