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
| Sep 5, 2014
First Look: Zaha Hadid's Grace on Coronation towers in Australia
Zaha Hadid's latest project in Australia is a complex of three, tapered residential high-rises that have expansive grounds to provide the surrounding community unobstructed views and access to the town's waterfront.
| Sep 3, 2014
Ranked: Top local government sector AEC firms [2014 Giants 300 Report]
STV, HOK, and Turner top BD+C's rankings of the nation's largest local government design and construction firms, as reported in the 2014 Giants 300 Report.
| Sep 3, 2014
New designation launched to streamline LEED review process
The LEED Proven Provider designation is designed to minimize the need for additional work during the project review process.
| Sep 2, 2014
Ranked: Top green building sector AEC firms [2014 Giants 300 Report]
AECOM, Gensler, and Turner top BD+C's rankings of the nation's largest green design and construction firms.
| Sep 1, 2014
Ranked: Top federal government sector AEC firms [2014 Giants 300 Report]
Clark Group, Fluor, and HOK top BD+C's rankings of the nation's largest federal government design and construction firms, as reported in the 2014 Giants 300 Report.
| Aug 29, 2014
China Syndrome: How long will U.S. firms keep milking the Middle Kingdom?
U.S. architecture and engineering firms like Goettsch Partners have been enjoying full employment in China. But will there come a point when Chinese officials—and Chinese designers—say, We can handle this? BD+C's Robert Cassidy digs into this issue.
| Aug 28, 2014
Stantec releases design for Edmonton's tallest tower
At 227 meters, Stantec Tower will be the tallest building in the city, dwarfing the two next-tallest: Epcor Tower and Manulife Tower.
| Aug 27, 2014
Designs for community-based workspace in Carlsbad unveiled
Cruzan announced make, a 175,000-square-foot office redevelopment project on the coast of Carlsbad, Calif. Cruzan will usher this next generation of community-based, integrated workspace into existence in fall 2014.
| Aug 25, 2014
Tall wood buildings: Surveying the early innovators
Timber has been largely abandoned as a structural solution in taller buildings during the last century, in favor of concrete and steel. Perkins+Will's Rebecca Holt writes about the firm's work in surveying the burgeoning tall wood buildings sector.
| Aug 25, 2014
'Vanity space' makes up large percentage of world's tallest buildings [infographic]
Large portions of some skyscrapers are useless space used to artificially enhance their height, according to the Council on Tall Buildings and Urban Habitat.