Hot office markets traditionally follow cities that have the hottest housing markets, since new home buyers need jobs to make their mortgage payments. Here are a few of the cities that look to be hot in 2017 in providing office space for new businesses, in addition to having strong housing growth according to Business Insider.
These areas have a low supply of office space, and are seeing a shortage of available office space and an increasing rental rate on new leases. If you are looking to lease a new office space in one of these cities, you are likely to see more competition, and an increasing monthly rental rate per square foot. You can also expect that landlords will be less likely to make concessions if there are several applications competing for the same office space.
Nashville is expected to see home appreciation growth over 4%, and there is also high population growth. Nashville has always been chic, but high home appreciation in this city means that it is increasing the job base and many growing new businesses.
Seattle has always been a high tech hub thanks to businesses such as Amazon, Microsoft, and many other innovative companies. The area is seeing hot increases in housing prices, and the demand for commercial office space is high as well.
Utah continues to see huge gains in population thanks to its affordable housing market and low cost of living. However, some areas such as Provo are seeing a shortage of office space. Developers have not been able to keep up with the growth in the city, causing a shortage of office space.
Orlando is on pace to becoming the second largest city in Florida in the next few years. Fueled by retirees, and people moving in from other states, Orlando has seen double digit growth in many areas of its economy. Office spaces are being built in earnest, but the existing supply of Class A office space is not adequate for the market demand, and the spaces under construction have mostly been sold or leased.
In contrast here are several office markets are that are bargains, and office space can be found for less money. Landlords here will make concessions for long term leases if you sign a lease for three or more years.
Detroit is has many vacancies and an office space can be found at a bargain price per square foot in many parts of the city. Because many people are have learned about the bargains to be found in Detroit, many of the trendier downtown areas are already seeing growth in the rental rates.
Phoenix has not fully recovered from the recession and the economy is somewhat flat, in spite of solid job growth. Vacancies in the office market remain strong, although the area is seeing a number of large investors buying up some larger commercial office buildings, such as the Biltmore Financial Center, which was purchased for $163M by an investment fund