Top 5 Most Expensive Office Submarkets In The US
USA – San Francisco’s Menlo Park, which houses the headquarters of Facebook, was ranked as the priciest office submarket in the country during the fourth quarter, reported Axios on Wednesday evening (10 February), citing data from commercialsearch.com.
The California city led the pack with an average asking rent of US$109.57 psf. It is followed by the Plaza District in Manhattan (US$104.29 psf) and SoHo in the same borough (US$94.86 psf).
Completing to the top 5 are the Bay Area’s Palo Alto (US$ 92.90 psf), and Times Square/Hell’s Kitchen in Manhattan (US$87.73 psf).
Notably, the figures only cover office leases of 25,000 sq ft or more, excluding smaller office premises.
However, a recent report from Moody’s Analytics has forecasted that effective office rents in New York and California’s Silicon Valley could significantly decline this year.
In particular, that in San Francisco and San Jose are expected to fall by 15 percent and 13.3 percent respectively, while that in New York could drop by 8.9 percent in 2021.
The silver lining is that effective office rents across all 3 metro areas could hit rock-bottom by 2022.
“Though we expect the (US) office sector will suffer more severely in 2021 than it did in 2020, the vaccine rollout brings hope for more in-person business later this year and into 2022,” said Barbara Denham, Senior Commercial Real Estate (CRE) Economist at Moody’s Analytics.
