Houston continues to be a paradise for AEC firms. The Texas metroplex has more than 14.4 million sf of office construction in the works, making it the No. 1 market in North America for office building, according to Colliers International’s 2015 North America Office Market report.
This report assesses 92 markets in the U.S. and Canada, and analyzes factors and trends that might impact the office construction market’s health. Despite a slow first quarter, Colliers is forecasting growth for this year.
The top 10 markets in North America, in descending order, are Houston, Seattle/Puget Sound, San Jose, Washington D.C., Dallas, Toronto, Calgary, San Francisco, Boston, and Phoenix. Combined, they accounted for 58% of the 113.8 million sf of office space underway in the U.S. and Canada in the first quarter of this year. That percentage is more than double these markets’ 27% share of existing office inventory.
As of the first quarter, office construction in the United States stood at 95.2 million sf, or 1% off from the same period a year earlier. However, deliveries in the first quarter, at 16 million sf, were the highest they’d been since the third quarter of 2009. Colliers says demand for new space “remains voracious” high-tech oriented markets. On the other hand, the greatest oversupply risk is in energy driven markets.
Colliers still sees the U.S. office market as positioned for expansion this year. “Growth in nearly every subsector of the primary office-using employment sectors in Q1 2015 despite numerous headwinds bodes well for office demand going forward,” it predicts. And outside of a handful of markets, oversupply is not a concern.
Among the 10 largest office construction markets:
• Seattle has 8.29 million sf under construction, the vast majority of which is being built in its downtown area, where existing inventory exceeds 56 million sf.
• In San Jose, all of its 8.1 million sf of new office construction is occurring in the suburbs, which already have 68.4 million sf of existing office space available, but where San Jose’s vacancy rate is only 8%.
• Washington D.C. has an 11.7% urban vacancy rate and a 17.5% suburban vacancy rate. Nevertheless, Washington has nearly 4.4.million sf of office space under construction in its suburbs, and another 2.4 million sf being built in its downtown.
• Only 450,000 sf of the 5.8 million sf of offices under construction in Dallas will be downtown. The same dynamic is occurring in Houston, where only 1.4 million sf of its total office construction is downtown.
Related Stories
Industry Research | Feb 15, 2017
Putting workers first should be every employer’s priority
The latest Sodexo report on workplace trends explores 10 factors that are impacting the global work environment.
Office Buildings | Feb 8, 2017
London office building employs transitional forms to mediate between the varied heights of surrounding buildings
Friars Bridge Court will provide a transition between the unvarying height of the buildings to the south and the more varied heights of the northern buildings.
Office Buildings | Feb 7, 2017
SOM-designed HQ will provide new riverfront space for C.H. Robinson
Over 1,000 employees will work in the HQ building when completed.
Office Buildings | Feb 6, 2017
The see-through office: Why interior glass is all the rage in workplace design
The hottest material in workplace design—interior glass—opens offices to light and collaboration. But what about privacy and acoustics?
Office Buildings | Feb 3, 2017
Zurich defies center-core office archetype with stacked, cantilevered HQ
The top bar is 500 feet long, spans 180 feet between the bottom two bars, and cantilevers out 60 feet to the east.
Office Buildings | Feb 2, 2017
3 tips for designing workplaces that support culture, brand, and community
An authentic culture cannot be forced, but can be encouraged and supported.
Office Buildings | Dec 14, 2016
The importance of 'Place' in the workplace
More, and more, companies are emphasizing the importance of creating a meaningful sense of place in the office environment for all of their employees, writes Gensler's Kevin Rosenstein.
High-rise Construction | Dec 13, 2016
The tallest building in Manhattan’s Meatpacking district tops out
The office, designed by CetraRuddy, will be completed in 2017.
| Dec 6, 2016
Workplace pilots: Test. Learn. Build
Differentiated from mock-ups or beta sites, workplace pilots are small scale built work environments, where an organization’s employees permanently reside and work on a daily basis.
Office Buildings | Dec 6, 2016
eBay’s San Jose headquarters has a new interactive hub and welcome center named Main Street
The campus’s new ‘front door’ is designed to immerse visitors and employees into the company’s global commerce.
