JLL: Q3 2016 Local Markets by Office Space Under Construction (largest, places, Boston)
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Not much talk about Baltimore on this thread but it seems too be more happening than it appears . YES Baltimore seems to be on the rebound .
Baltimore is on a huge rebound. There are cranes all over downtown. The skyline is rapidly changing. Very few people seem to know how much is going on in Baltimore including locals.
Quote:
Originally Posted by Ant131531
Kind of surprised by DC. Is the private sector there growing that rapidly? It's clearly not the government.
The space the government leases has shrunk considerably over the past few years. Just shows how diverse DC really is. It's not all government. The growth in DC is crazy. I can't even begin to keep up with everything going on in DC. I don't know how anybody can.
Location: That star on your map in the middle of the East Coast, DMV
8,141 posts, read 7,612,515 times
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Quote:
Originally Posted by Ant131531
Kind of surprised by DC. Is the private sector there growing that rapidly? It's clearly not the government.
There is considerable construction going on throughout the DMV I can assure you that. No not all probably not even half is "government" related. This region is/has become a Goliath in terms of business activity in the US, much like Dallas, Chicago etc.
Kind of surprised by DC. Is the private sector there growing that rapidly? It's clearly not the government.
So far this year, total non-farm employment has grown at an annualized rate of 2.04 percent, adding an estimated 11,700 new jobs. This compares to 7,370 jobs created in 2015. Of the jobs created so far in 2016, 6,430 of them were in office-using sectors of the economy. The government sector has seen the greatest increase so far in 2016, adding an estimated 5,270 new jobs. While significant, the office market is not currently receiving new demand from these jobs as the General Services Administration is still trying to shrink the Federal Government’s leasing footprint. In fact, it is expected that, as Federal leases roll, their space requirements could decrease by as much as 15 percent...
Currently, there is 4.0 million square feet of space under construction, and at the end of the third quarter 61.4 percent of the space was committed. This leasing activity, in most cases, is not new demand but rather relocations from other product in the market. As a result, large blocks of space will be left behind as tenants relocate into their new offices...
Additionally, with redevelopments, demolitions and renovations being so prevalent, vacancy has been pushed to the future. Given all the leading indicators, demand for office space is expected to grow, but at a slower rate than new supply is being brought to the market. As a result, the overall vacancy rate is expected to rise, and if redevelopment activity stops as the demand for high-end space softens, they could rise to over 15 percent during the next three years.
Kind of surprised by DC. Is the private sector there growing that rapidly? It's clearly not the government.
New Class A office is being built and Class B and Class C office is being converted to residential in downtown DC. This is a very significant time period for the District of Columbia as it represents a beginning shift from office only ghettos to residential mixed use buildings.
Over the next 10 years, D.C.'s downtown will not only triple in size as all the sub-markets converge on each other to make one giant mass, but downtown will finally begin to change toward more of a mixed use which is badly needed. The more new office the spreads to NOMA, Union Market, Northwest One, Capital Riverfront, The Wharf, Buzzed Point, and the SW Eco District, the more space opens up in the older parts of downtown DC.
So far this year, total non-farm employment has grown at an annualized rate of 2.04 percent, adding an estimated 11,700 new jobs. This compares to 7,370 jobs created in 2015. Of the jobs created so far in 2016, 6,430 of them were in office-using sectors of the economy. The government sector has seen the greatest increase so far in 2016, adding an estimated 5,270 new jobs. While significant, the office market is not currently receiving new demand from these jobs as the General Services Administration is still trying to shrink the Federal Government’s leasing footprint. In fact, it is expected that, as Federal leases roll, their space requirements could decrease by as much as 15 percent...
Currently, there is 4.0 million square feet of space under construction, and at the end of the third quarter 61.4 percent of the space was committed. This leasing activity, in most cases, is not new demand but rather relocations from other product in the market. As a result, large blocks of space will be left behind as tenants relocate into their new offices...
Additionally, with redevelopments, demolitions and renovations being so prevalent, vacancy has been pushed to the future. Given all the leading indicators, demand for office space is expected to grow, but at a slower rate than new supply is being brought to the market. As a result, the overall vacancy rate is expected to rise, and if redevelopment activity stops as the demand for high-end space softens, they could rise to over 15 percent during the next three years.
We need to really hope that vacancy remains high for as long as possible so developers continue to choose residential new construction and continue to convert vacant office buildings to residential. It represents the perfect storm to change downtown DC.
Height limits are to blame for the office ghetto created in the 1950-1980's because developers needed to squeeze as much profit as they could out of the height allowed. Now with the expansion of downtown headed out in all directions, developers of older office buildings in the older parts of downtown are trying to go residential which has MAJOR implication's for D.C's downtown.
It's interesting that Chicago, while doing alright, isn't exactly booming and yet it has a huge amount of office space under construction. What are the underlying reasons for that?
Q3 2016 Local Markets by Office Space Under Construction
New York 11,567,853 s.f.
Dallas 10,947,382 s.f.
Washington, DC 10,224,898 s.f.
Chicago 8,376,664 s.f.
Seattle-Bellevue 7,159,557 s.f.
Silicon Valley 5,581,376 s.f.
San Francisco 4,435,830 s.f.
Nashville 3,981,918 s.f. Philadelphia 3,866,458 s.f.
Atlanta 3,781,397 s.f.
Denver 3,649,889 s.f.
Houston 3,224,356 s.f.
Charlotte 2,491,211 s.f.
Austin 2,221,861 s.f.
Salt Lake City 2,122,795 s.f.
Los Angeles 2,092,795 s.f.
Orange County 1,930,680 s.f.
Baltimore 1,888,432 s.f.
Boston 1,867,642 s.f.
Raleigh-Durham 1,833,068 s.f.
Phoenix 1,692,140 s.f.
Portland 1,605,421 s.f.
Fort Worth 1,222,951 s.f.
San Francisco Peninsula 1,215,839 s.f.
Miami 989,041 s.f.
Columbus 737,000 s.f.
San Antonio 728,077 s.f.
Detroit 418,334 s.f.
Pittsburgh 412,000 s.f.
Indianapolis 372,977 s.f.
Hampton Roads 287,858 s.f.
Cincinnati 260,000 s.f.
Oakland-East Bay 250,000 s.f.
Minneapolis 249,500 s.f.
Sacramento 239,770 s.f.
Cleveland 197,000 s.f.
San Diego 188,435 s.f.
New Jersey 170,445 s.f.
Orlando 135,000 s.f.
St. Louis 125,000 s.f.
Milwaukee 110,000 s.f.
Fort Lauderdale 94,817 s.f.
Richmond 60,000 s.f.
Westchester County 0 s.f.
West Palm Beach 0 s.f.
Tampa Bay 0 s.f.
North San Francisco Bay 0 s.f.
Louisville 0 s.f.
Long Island 0 s.f.
Jacksonville 0 s.f.
Fairfield County 0 s.f.
It's interesting that Chicago, while doing alright, isn't exactly booming and yet it has a huge amount of office space under construction. What are the underlying reasons for that?
There's more demand than some people would like to acknowledge. You don't build 1,000 ft. skyscrapers if there isn't demand for space. Chicago's losing those of the lower classes and replacing them with more affluent individuals.
I'm surprised New Jersey is that low, especially if that includes the entire state.
Outside of Jersey City, and maybe Newark, you can't build anything in NJ. The most anti-development state for sure, and it wouldn't change at least until Christie leaves office in 2018.
I guess they'd just have to keep increasing taxes.
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