- Top 10 average asking rents start at $74 per square foot
- West Coast submarkets dominate ranking with 28 of 50 entries
- NYC home to half of Northeastern submarkets in ranking
- Florida leads priciest entries in Southern region
During the second year of the pandemic, the U.S. office market continued its exploration of more modern work environments. It also saw a significant increase in investment toward life science and medical office properties, which contributed to lifting some markets up among the most desirable destinations for capital in 2021.
So, in this report, we present a snapshot of the 50 priciest U.S. office submarkets in Q4 2021, as ranked by average asking rents per square foot (see methodology for details). Notably, an overview by region shows that more than half of the country’s most expensive 50 office submarkets are located on the West Coast — 27 locations in California markets and one highly desirable neighborhood in Seattle, Wash.
The second-most dominant regional representation in our top 50 included 12 Northeast submarkets, six of which are in New York City. And, representing Southern U.S. locations, the remaining 10 entries include submarkets in Florida and Texas, as well as the Washington, D.C.-suburban Maryland and greater Virginia office market.
Menlo Park, Plaza District & Mountain View Lead Top 10
The 10 most expensive office submarkets in the U.S. averaged full-service asking rents of between $74 and nearly $119 per square foot. Specifically, office space in Menlo Park (a San Francisco submarket) ranked first, with average asking rents here resting at $118.73 per square foot in the final quarter of 2021. Next, the Plaza District in Manhattan landed second, with an average asking rent of $107.41 per square foot — the only other top 50 entry to record figures of more than $100 per square foot.
Check out the table below for the full list of the 50 priciest office submarkets in the U.S. in Q4 2021 and read on for regional highlights.
Two Bay Area office submarkets took the third and fourth spots in our ranking: Mountain View West landed in third place, with office space here asking rents of $95.64 per square foot, on average. Close behind in fourth place, Palo Alto figures averaged full-service equivalent asking rents of $93.49 per square foot in Q4 2021. Likewise, San Francisco submarket Redwood City ranked fifth at the close of last year, with figures here averaging $92.50 per square foot in asking rents.
The second and third New York City entries in the top 10 echelon took the sixth and seventh spots, respectively: Manhattan office space for rent in the Chelsea submarket averaged the sixth-highest full-service equivalent asking rents in Q4 2021 — $84.67 per square foot. Next, an asking rents average of $81.24 per square foot landed the Times Square – Hell’s Kitchen submarket in seventh place.
On the opposite coast, Sunnyvale West asking rents averaged $78.01 per square foot in Q4 2021, placing the Bay Area submarket eighth in our ranking. Next, coming in at ninth place was the only Los Angeles submarket to make it into the top 10. Asking rents for office space in Beverly Hills rested at an average of $75.20 per square foot. Finally, San Francisco’s South Financial District rounded out the top 10, with an asking rents average of $74.83 per square foot at the close of 2021.
Pacific Coast Submarkets Dominate Top 50 with 1 Washington State & 27 California Entries
Impressively, California submarkets accounted for 27 of the 50 entries in our ranking. Asking office rents averages among these Golden State submarkets ranged from $46.55 per square foot for office space in University City, San Diego to $118.73 per square foot in Menlo Park. Of these, submarkets in San Francisco accounted for a small majority — representing nine of California’s 27 entries — while the Bay Area and Los Angeles each contributed seven. San Diego submarkets accounted for the remaining four California office submarkets to make the cut.
Just one West Coast submarket outside of California made the top 50 ranking: Hailing from Washington state, asking rents for Seattle office space in Bellevue averaged $48.58 per square foot in Q4 2021, landing in 43rd place.
NYC Home to Half of 12 Northeast Submarkets in Top 50
The second-largest regional group in the ranking was claimed by 12 Northeastern U.S. submarkets, six of which are located in Manhattan. In particular, the priciest office space in New York City at the close of last year was in the Plaza District, where asking rents averaged $107.41 per square foot. This Midtown submarket is also home to some of the top-selling U.S. office buildings of 2021.
Chelsea (with average asking rents of $84.67 per square foot) and the Times Square – Hell’s Kitchen ($81.24 per square foot) submarkets were Manhattan’s second- and third-priciest, respectively. The only NYC submarket in the top 50 that’s not located in Midtown is the Financial District, where office asking rents averaged $56.26 per square foot in Q4 2021. These figures ranked FiDi 29th nationally.
The remaining six Northeastern U.S. entries included submarkets from Connecticut, Massachusetts, New Jersey, and Pennsylvania. Among them, the Hudson Waterfront South submarket in New Jersey ranked best. Asking rents for office space here averaged $56.52 per square foot in Q4 2021.
Not far behind, the two Massachusetts entries revealed the priciest office space in Boston. More precisely, asking rents in the city’s central business district submarket averaged $56.41 per square foot. It was followed closely by office space in downtown Boston, which ranked 33rd in the country with an average of $54.77 per square foot in Q4 2021 asking rents.
Brickell Office Space Claims Priciest Southern U.S. Entry
Southern U.S. submarkets accounted for the remaining 10 entries in the top 50. In this region, the priciest position was occupied by Miami office space in the Brickell submarket, where asking rents in Q4 2021 averaged $68.52 per square foot. Three other Florida submarkets also ranked among the most expensive in the country at the close of last year: Fort Lauderdale’s Hollywood submarket ($48.63); Fort Lauderdale central business district ($47.48); and Coral Gables – downtown Miami ($47.04 per square foot).
To the west, Texas contributed three entries to the top 50, one of which was the second-priciest Southern U.S. submarket: Asking rents for office space in downtown Austin averaged $58.93 per square foot in the final quarter of 2021.
Finally, the ranking also included three submarkets in the Washington, D.C. – suburban Maryland metropolitan area. Among them, asking rents for office space in East End Washington, D.C. averaged $58.17 per square foot — the third-priciest among Southern U.S. submarkets and 24th among the top 50 in the U.S. Similarly, office space in the capital’s central business district averaged asking rents of $56.31 per square foot, and Q4 listings in the suburban submarket of Rosslyn recorded asking rents of $46.69 per square foot, on average.
The analysis for this ranking was based on data we compiled on February 16, 2021, from CommercialEdge. We considered all U.S. office submarkets where there were at least 10 properties and 20 listings of office space for rent during Q4 2021 for a total of 1,480 submarkets, as defined by CommercialEdge. For each of these subdivisions, lease rates were averaged to the full-service-equivalent asking rents per square foot per year, weighted by square footage. The data includes only office properties equal to or larger than 25,000 square feet.
For the purposes of this article, we ranked the 50 highest Q4 2021 average full-service-equivalent asking rates per square foot per year. We followed the U.S. Census region divisions for the regional grouping of the submarkets referenced.
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