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
| Jun 12, 2012
SAC Federal Credit Union selects LEO A DALY to design corporate headquarters
LEO A DALY also provided site selection, programming and master planning services for the project over the past year.
| Jun 11, 2012
Hill International selected as CM for Porto Arabia Towers in Qatar
The complex is a mixed-use development featuring both residential and commercial properties.
| Jun 8, 2012
Thornton Tomasetti/Fore Solutions provides consulting for renovation at Tufts School of Dental Medicine
Project receives LEED Gold certification.
| Jun 6, 2012
KPF designs tower for Yongsan IBD
The master plan, created by Studio Daniel Libeskind, is a dynamic urban environment containing contributions from 19 different architects practicing in diverse locations around the globe.
| Jun 6, 2012
SOM urges Chicago tenants to partner with landlords to cut energy use
Tenants can exceed building energy challenge targets recently announced by Mayor Emanuel.
| Jun 5, 2012
Walker Parking opens office in Abu Dhabi
Walker has been in Abu Dhabi since May 2011 but in a temporary office suite.
| Jun 4, 2012
Brownfield goes green
Chicago Center for Green Technology uses high-speed, energy-efficient hand dryers to share its green message and earn LEED credits.
| Jun 1, 2012
New BD+C University Course on Insulated Metal Panels available
By completing this course, you earn 1.0 HSW/SD AIA Learning Units.
| Jun 1, 2012
Robert Wilson joins SmithGroupJJR
Wilson makes the move to SmithGroupJJR from VOA Associates, Inc., where he served as a senior vice president and technical director in its Chicago office.