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
Office Buildings | Feb 3, 2015
Bjarke Ingels' BIG proposes canopied, vertical village for Middle East media company
The tensile canopy shades a relaxation plaza from the desert sun.
Office Buildings | Feb 2, 2015
Study shows modern workers struggle to leave work at the office
Study findings indicate that more than half the respondents holds tight to their smartphones, checking and responding to email and taking phone calls, all or most of the time.
Building Team | Feb 2, 2015
Solid spending increases projected for construction industry in 2015
The commercial construction sector is now looking at double-digit increases in 2015, led by vigorous levels of demand for hotels and office buildings.
Sponsored | Building Team | Jan 30, 2015
The 4 leadership behaviors that really matter
Research conducted by McKinsey & Company suggests that the secret to developing effective leaders is to encourage four types of behavior, which includes seeking diverse perspectives and supporting others.
Energy Efficiency | Jan 28, 2015
An urban wind and solar energy system that may actually work
The system was designed to take advantage of a building's air flow and generate energy even if its in the middle of a city.
Office Buildings | Jan 27, 2015
London plans to build Foggo Associates' 'can of ham' building
The much delayed high-rise development at London’s 60-70 St. Mary Axe resembles a can of ham, and the project's architects are embracing the playful sobriquet.
Modular Building | Jan 21, 2015
Chinese company 3D prints six-story multifamily building
The building components were prefabricated piece by piece using a printer that is 7 meters tall, 10 meters wide, and 40 meters long.
| Jan 21, 2015
Tesla Motors starts construction on $5 billion battery plant in Nevada
Tesla Motors’ “gigafactory,” a $5 billion project on 980 acres in Sparks, Nev., could annually produce enough power for 500,000 electric cars.
| Jan 20, 2015
Daring hotel design scheme takes the shape of cut amethyst stone
The Dutch practice NL Architects designed a proposal for a chain of hotels shaped like a rock cut in half to reveal a gemstone inside.
| Jan 20, 2015
Avery Associates unveils plans for London's second-tallest tower
The 270-meter tower, dubbed the No. 1 Undershaft, will stand next to the city's "Cheesegrater" building.