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Office Market Research/Reports

  1. Washington

    1. Seattle Office Market Report
      Fourth Quarter 2017

      The Seattle office market had a solid, stable 2017, which enhanced the market's appeal to investors. The result was the second year in a row with about $3 billion in office property sales. Long-term confidence in Seattle's economy and office market was exhibited in capitalization rates well below 5% across a variety of product sold. In conjunction with strong rent growth in the Class A category and limited investment opportunities, these rates pushed prices above $900 per square foot. National and international real estate funds and private REITs were the most active buyer classes.

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      Fourth Quarter 2017 Seattle Office Market Report
      Third Quarter 2017 Seattle Office Market Report
      Second Quarter 2017 Seattle Office Market Report
      First Quarter 2017 Seattle Office Market Report
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  2. Oregon

    1. Portland Office Market Report
      Fourth Quarter 2017

      Cycle-high construction volume, institutional investor confidence, and robust leasing activity all reaffirmed the strength of the Portland office market at the end of 2017. Vacancies marketwide fell to a new cycle low of 7.0%, following 324,208 square feet of positive net absorption, nearly all of which occurred in the Downtown area. Rental rates climbed by 5.2% year over year, to an average of $25.88 FS, while new Class A developments were asking in the $30s NNN. Institutional investors continue to see value-add opportunities in the Portland market, acquiring properties with the intent to upgrade and reposition at a substantial profit. The local economy has benefited greatly from the growth of the technology sector, reporting sub-4% unemployment rates throughout the fourth quarter, as Portland and its suburbs vied with other cities nationwide to host Amazon's HQ2.

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      Fourth Quarter 2017 Portland Office Market Report
      Third Quarter 2017 Portland Office Market Report
      Second Quarter 2017 Portland Office Market Report
      First Quarter 2017 Portland Office Market Report
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  3. California

    1. Oakland/East Bay Office Market Report
      Fourth Quarter 2017

      The inner East Bay office real estate market stayed tight in the fourth quarter of 2017, with vacancies holding at 8.4% amid 10,826 s.f. of positive net absorption. Rental rates climbed dramatically year over year, with jumps of 30% or more for desirable space in close proximity to BART. The strength of the Downtown Oakland market was reflected in investment sales this quarter, as institutional buyers from Los Angeles and New York acquired assets in the CBD at high price tags and low cap rates. Development activity is at a cycle-high, with 1.36 million s.f. of office space under construction and another 400,000 s.f. likely to break ground in early 2018. As the technology industry broadens and grows, core East Bay markets such as Oakland, Berkeley, and Emeryville are positioned to benefit from inbound demand from San Francisco, where non-tech tenants are likely to be priced or squeezed out by the expansion of the city's most prominent sector. A relatively affordable housing market, compared to San Francisco and Silicon Valley, also makes the East Bay appealing to companies seeking to ease their workers' commutes.

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      Fourth Quarter 2017 Oakland/East Bay Office Market Report
      Third Quarter 2017 Oakland/East Bay Office Market Report
      Second Quarter 2017 Oakland/East Bay Office Market Report
      First Quarter 2017 Oakland/East Bay Office Market Report
    2. Orange County Office Market Report
      Third Quarter 2017

      The Orange County office market continued its improvement in the third quarter of 2017, as prices continued to increase, vacancy remained stable, and the amount of available space in the market increased. We expect the ongoing trend of positive absorption in the market to continue, along with consistent increases in occupancy costs. With larger office buildings on the way into the Orange County market, a bump in inventory may apply some upward pressure on vacancy in the short run. Nonetheless, with strong demand and consistent employment growth, we expect further growth to continue.

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      Third Quarter 2017 Orange County Office Market Report
      Second Quarter 2017 Orange County Office Market Report
      First Quarter 2017 Orange County Office Market Report
      Fourth Quarter 2016 Orange County Office Market Report
    3. Peninsula/San Mateo County Office Market Report
      Fourth Quarter 2017

      The Peninsula office market stayed strong in the fourth quarter, with growing demand driving 230,270 s.f. of positive net absorption and lowering the vacancy rate by 60 basis point, to 9.8%. A lack of availabilities limited leasing activity to 564,894 s.f. San Mateo continues to attract tenants, as companies look to relocate from high-priced markets in San Francisco and Silicon Valley. Asking rental rates are up by about 3.7% from a year ago to an average of $4.78/s.f. With continued strong demand from a variety of companies, the Peninsula market is poised to enjoy a strong 2018.

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      Fourth Quarter 2017 Peninsula/San Mateo County Office Market Report
      Third Quarter 2017 Peninsula/San Mateo County Office Market Report
      Second Quarter 2017 Peninsula/San Mateo County Office Market Report
      First Quarter 2017 Peninsula/San Mateo County Office Market Report
    4. Sacramento Office Market Report
      Third Quarter 2017

      A hot summer further tightened the Sacramento office real estate market, as vacancies in the metro area fell to a cycle-low 10.8% on the strength of 600,073 square feet of positive net absorption. Rental rates continue to trend upward, pressed by growing demand and stagnant supply, reaching a marketwide average of $1.80, fully serviced. With most Bay Area value-add opportunities having been exhausted, institutional investors are considering Sacramento-area assets, both downtown and in preferred suburban submarkets such as Roseville/Rocklin, pushing some sale prices past $200/sf. The Sacramento MSA economy has added 16,100 jobs year over year, trimming unemployment to 5.2%, and ongoing expansion of office-based sectors such as Professional and Business Services means more demand for space. A lack of large-block availabilities has slowed the influx of Bay Area companies to the Sacramento market, but this inbound demand could increase with new construction, suggesting that vacancies and rental rates might hold firm in the short run against an increase in supply.

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      Third Quarter 2017 Sacramento Office Market Report
      Second Quarter 2017 Sacramento Office Market Report
      First Quarter 2017 Sacramento Office Market Report
      Fourth Quarter 2016 Sacramento Office Market Report
    5. San Diego Office Market Report
      Fourth Quarter 2017

      A diverse employment base combined with a well-educated workforce and tepid development have set the San Diego office market on firm footing. The submarkets encompassing the Golden Triangle are among the county's central tech and life science hubs, with Downtown trying to establish itself as the home for the next wave of start-ups. San Diego doubled its year-over-year absorption in 2016 (hitting 1.4 million SF of annual net absorption), although 2017 fell short of that mark. Tightening vacancies, limited sublet space, a lack of wide-scale development, and steady rent growth have contributed to the confidence of investors who continue to find a market with average yields more favorable than in the apartment sector. Downtown was a favorite target of institutional capital in 2017 with a number of big properties trading hands.

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      Fourth Quarter 2017 San Diego Office Market Report
      Third Quarter 2017 San Diego Office Market Report
      Second Quarter 2017 San Diego Office Market Report
      First Quarter 2017 San Diego Office Market Report
    6. San Francisco Office Market Report
      Fourth Quarter 2017

      The San Francisco office market got its second wind in the fourth quarter, closing 2017 with surging technology sector demand, rising rental rates, and intense competition for space. After leveling off around their late-2016 peak, rental rates began to climb again, as landlords marketing creative or recently renovated offerings had their pick of an increasingly robust roster of tenants. Average asking rents rose to the low-to-mid $70s FS for Class A space, the high-$60s FS for quality Class B product, and around $70 FS for creative Class C offerings in SOMA, up about 2% year over year, with more substantial rate hikes likely to come.

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      Fourth Quarter 2017 San Francisco Office Market Report
      Third Quarter 2017 San Francisco Office Market Report
      Second Quarter 2017 San Francisco Office Market Report
      First Quarter 2017 San Francisco Office Market Report
    7. Silicon Valley Office Market Report
      Fourth Quarter 2017

      The Silicon Valley office market remained steady during the closing quarter of 2017, with 16,596 s.f. of positive net absorption bringing vacancies to 9.51%. Demand in the market is strong, as the Silicon Valley economy continues to lead the nation in growth, income, innovation, and venture capital investment. The unemployment rate stands at 2.6%, its lowest point since December 2000. This quarter was active on both the leasing and investment fronts, with recognizable tenants such as WeWork and Hitachi signing major deals. Rental rates for office product held firm to end 2017, and the nearly 4.6 million s.f. of space under construction has the potential to drive absorption gains in a well-balanced market in 2018.

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      Fourth Quarter 2017 Silicon Valley Office Market Report
      Third Quarter 2017 Silicon Valley Office Market Report
      Second Quarter 2017 Silicon Valley Office Market Report
      First Quarter 2017 Silicon Valley Office Market Report
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  4. Arizona

    1. Phoenix Office Market Report
      Third Quarter 2017

      The Phoenix office real estate market stayed strong in the third quarter, with vacancies at a cycle-low 15.9% and rental rates rising to an average of $24.12 fully serviced. Leasing activity approached 2.5 million square feet, signaling high levels of demand for office space, fueled by a strong local economy that reported 4.3% unemployment. Continued economic growth and job creation should drive expansion in the Phoenix office real estate market for quarters to come.

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      Third Quarter 2017 Phoenix Office Market Report
      Second Quarter 2017 Phoenix Office Market Report
      First Quarter 2017 Phoenix Office Market Report
      Fourth Quarter 2016 Phoenix Office Market Report
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  5. Nevada

    1. Reno Office Market Report
      Third Quarter 2017

      The summer of 2017 was a busy one for the northern Nevada office market. The third quarter in the Reno office market pushed vacancy to 9%; the lowest since post-recession. Rental rates continue to trend upwards with an asking lease rate of $1.48 per square foot, per month full service compared to this time last year. Net absorption for the third quarter continued in a positive direction in the Reno market, making the sixth consecutive quarter for positive net absorption. This quarter's net absorption was 65,739 SF.

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      Third Quarter 2017 Reno Office Market Report
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