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
Building Tech | Apr 13, 2016
The Hyperchair gives employees access to their own personal set of climate controls
Not only can the Hyperchair reduce heating and cooling costs and maximize employee comfort, but it can help a company become more environmentally friendly, as well.
Architects | Mar 20, 2016
Ars Gratia Artis: A North Carolina architect emphasizes the value of art in its designs
Turan Duda says clients are receptive, but the art must still be integral to the building’s overall vision.
Office Buildings | Mar 16, 2016
Google releases new plans and renderings of its Mountain View campus
The original canopy design scheme is still in place, but the plans now call for it to be opaque.
Office Buildings | Mar 10, 2016
Expedia unveils design for Seattle waterfront campus
Transparency and outdoor areas will give the complex a Pacific Northwest vibe.
Office Buildings | Mar 9, 2016
CBRE: Workplace wellness on the rise
As insurance premiums and deductibles continue to rise, both employees and employers are evaluating options to improve their wellbeing, writes CBRE Healthcare Managing Director Craig Beam.
Market Data | Mar 6, 2016
Real estate execs measure success by how well they manage ‘talent,’ costs, and growth
A new CBRE survey finds more companies leaning toward “smarter” workspaces.
Office Buildings | Mar 2, 2016
HDR redesigns Twin Cities' studio to have coffee shop vibe
With open spaces, huddle rooms, and a design lab, the firm's new digs are drastically different than the old studio, which felt like working in a law office. Design Principal Mike Rodriguez highlights HDR's renovation plan.
Office Buildings | Mar 1, 2016
SmithGroupJJR and The Christman Company create a financial headquarters without the drab
The “un-bank” design ditched the stuffy design elements typical of financial institutions and, instead, created something much more inviting.
Office Buildings | Feb 29, 2016
Mobileapolis: An open experiment in workplace mobility
Check out this fun infographic that explains Perkins+Will's ambitions, findings, and next steps for the future home of the firm's Minneapolis office.
Office Buildings | Feb 26, 2016
Benching, desking, and (mostly) paper-free: Report identifies top trends in workplace design for 2016
The report, from Ted Moudis Associates, encompasses over 2.5 million sf of workspace built over the past two years.
