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
Modular Building | Jun 10, 2015
London debuts business complex made from 50 shipping containers
London's newest business complex, Pop Brixton, will support local entrepreneurs, create jobs, and is made entirely of shipping containers.
Office Buildings | Jun 9, 2015
Bjarke Ingels unveils stepped design for final WTC tower
The towering "staircase" will rise from St. Paul’s chapel to the skyline, leaning against One World Trade Center.
Office Buildings | Jun 9, 2015
Hines planning $300 million office tower for Denver skyline
Designed by Pickard Chilton, the 640,000-sf tower is geared for large-scale tenants, with features like floor-to-ceiling glass, a 5,000-sf fitness center, a tenant lounge, and a series of outdoor terraces.
Office Buildings | Jun 3, 2015
Tech's influence on the workplace: 4 lessons from the field
Beyond space and programmatic considerations, four tenets highlight today’s tech workplaces: strength of story, design empathy, technology presence, and hackerspace.
Office Buildings | Jun 1, 2015
SHoP Architects unveils dual-glass-box scheme for Uber HQ
The plan involves two glass buildings connected with criss-crossing bridges.
Office Buildings | Jun 1, 2015
Can you make a new building as cool as a warehouse?
Just as we looked at that boarded up warehouse and thought it could be something other, office towers can be reborn, writes CannonDesign's Robert Benson.
Multifamily Housing | May 28, 2015
Census Bureau: 10 U.S. cities now have one million people or more
California and Texas each have three of the one-million-plus cities.
Retail Centers | May 18, 2015
ULI forecast sees clear skies for real estate over next three years
With asset availability declining in several sectors, rents and transactions should rise.
Office Buildings | May 18, 2015
New ASHRAE standard offers test method to determine heat gain of office equipment
The standard will aid engineers in configuring cooling systems in office buildings.
Office Buildings | May 17, 2015
Mountain View, Calif., denies development rights for Google campus master plan
Despite Google’s offer of new bike paths, wetlands restoration, and other perks, the city of Mountain View, Calif., denied the company the development rights to construct a grand new headquarters.
