The office space market typically tracks growth in the labor force, and strong commercial real estate markets can often be an indication of positive economic growth for a city.
On a whole, overall demand for office space throughout the country has remained steady. There have, however, been some outliers. Houston, Northern California, and New York have experienced above average demand growth – particularly because of their fast-expanding technology and energy sectors. San Francisco is another “tech-fueled” city that actually topped the list in 2012 in terms of demand for office space growth with tech companies like Salesforce.com and SquareTrade Inc growing exponentially. These companies have been known to take up multiple floors in office buildings.
On the other side of the spectrum are cities where the housing market has yet to recover. Office rents in cities such as Las Vegas and Tucson have actually declined in 2013. When the bottom fell out of the housing market, North Las Vegas became home to the zip code with the highest foreclosure rate in the entire country, and bouncing back has taken a while. The over-abundant supply of office space in these cities has resulted in monthly rents that are well below the national average, and, ironically, a great place for startups.
According to Forbes, a number of America’s fastest growing cities in 2012 were in Texas, as low taxes and cheap real estate help to draw in jobs. Austin, Dallas, Houston, and San Antonio are all cities that Forbes lists as not only growing, but also creating opportunities. Other cities among Forbes’s list are San Jose, Salt Lake City, Seattle, and Atlanta.
For more information about commercial real estate in the US, contact Turnkey Office Space at [email protected]. We’ll be happy to talk you through some of the latest trends and expectations of businesses in the 21st century.