Suburban Denver at The Top of U.S. Markets For Prime Office Occupancy Cost Increases

Downtown Denver

DENVER — Suburban Denver had the highest increase in prime office occupancy costs—which reflect rent, plus local taxes and service charges for the highest-quality, “prime” office properties—from Q1 2016 through Q1 2017, among the U.S. markets studied in CBRE Research’s latest annual Global Prime Office Occupancy Costs report.

In addition to topping the list domestically, suburban Denver’s growth rate of 17.2 percent year-over-year was the fourth fastest globally, trailing only Durban, South Africa (21.2 percent), Buenos Aires, Argentina (20.0 percent), and Stockholm, Sweden (18.8 percent). At 15.3 percent growth, suburban Houston was the second fastest among U.S. markets, ranking No. 6 globally.

Overall, global prime office occupancy costs rose 1.9 percent year-over- year, with the Americas up 3.6 percent, EMEA up 0.8 percent and Asia Pacific up 1.2 percent.

“The average occupancy cost for suburban Denver’s highest-quality office properties is rising in large part due to a robust construction pipeline that is predominantly Class A or above. The delivery of new top-tier suburban office projects is leading to all-time high lease rates across the board,” said Matt Vance, economist and director of research and analysis for CBRE in Colorado.

“However, it’s important to note that while suburban Denver’s year-over-year change was significant, at a rate of US $31.40 per sq.ft. the market is far from ranking among the most expensive worldwide.”

Hong Kong (Central) and London’s West End remained the two most expensive office locations in the world. Hong Kong’s (Central) overall prime occupancy costs of US$303 per sq. ft. per year topped the “most expensive” list, followed by London’s West End (US$214 per sq. ft.), New York (Midtown) (US$203 per sq. ft.), Hong Kong (West Kowloon) (US$190 per sq. ft.) and Beijing (Central Business District (CBD)) (US$183 per sq. ft.).

“The global top-10 list reflects the ongoing strength of global gateway cities in attracting and maintaining a successful occupier base,” said Richard Barkham, global chief economist, CBRE.

CBRE tracks occupancy costs for prime office space in 121 markets around the globe. Of the top 50 “most expensive” markets, 21 were in Asia Pacific, 16 were in EMEA and 13 were in the Americas.


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