There’s no space like Trophy space and with urbanization sweeping across the United States, rents in premier office towers that make up the skylines are tightening, generating developer interest to build new office space and investor demand to acquire more office assets. Understanding that activity in one office market may be a bellwether for another, JLL reviews the Skylines in major markets across the nation annually. This year, we have taken our annual Skyline report to the next level, introducing for the first time a digital and interactive platform. With just a click, Class A and Trophy office towers can be quickly compared across 47 markets in North America.
Some of the shared trends among markets show that while the Central Business Districts and Downtown areas of the cities remain at the top of tenants’ choices of office space, a growing demand for unique offices and urbanized neighborhoods indicates office space preferences are changing, influenced in part by a growing millennial workforce.
Orlando Skyline in Full Recovery
As the economy continues to recover, leasing activity across the Orlando skyline is starting to pick up again. “Rental rates for all CBD buildings are expected to increase over the next 12 months as the market continues to tighten,” says Managing Director John Gilbert.
The majority of tenant requirements in the overall market remain focused on the downtown CBD. In fact, Red Lobster recently relocated its headquarters from the suburban market to downtown, inking a 91,000-square-foot space downtown. And from 2010 through 2014, the amount of space leased in the Skyline averaged roughly 589,000 square feet per year compared to an average of about 344,000 square feet per year during 2003 to 2007, the period leading up to the recession.
Mr. Gilbert looks forward to new development, “Only two spaces over 40,000 square feet are currently available. Such scarcity of large contiguous blocks of space will force new tenants to the market to consider proposed new office towers.”
Tampa’s Skyline is Hot
“The Tampa Skyline continues to experience high demand, especially as more and more companies seek a business address in the urban core,” said Gary Godsey, Senior Vice President. “However, an insufficient supply of large contiguous space or full floor availability among the trophy buildings of Downtown Tampa is driving tenants into other submarkets.”
There haven’t been any new buildings added to the Tampa skyline in over a decade, but one new building is expected to enter the development pipeline in the coming years, which could be expedited if an anchor tenant commits to pre-leasing the space.
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