Feb. 26, 2016
In a recently released report by JLL Research, Houston appeared among 23 other world cities in a list of the most expensive office locations, ranked by the occupancy costs of their premium office buildings.
The top five most expensive office locations in the world were Hong Kong, London, Beijing, New York and Shanghai. Other U.S. cities that were included were San Francisco, Washington DC, Boston, Los Angeles and Chicago.
Globalization and city competition
These, as well as other cities, are increasingly competing to secure the world’s most dynamic corporations, attract the best talent and pull in capital investment as globalization increases. Commercial real estate plays a pivotal role in this competition.
A barometer of relative city attraction
JLL’s Premium Office Rent Tracker provides a snapshot of a city’s premium office market and benchmarks office occupation costs on a like-for-like basis for comparison. The tracker acts as a barometer of relative city attraction, and highlights the strains that many cities face as their real estate markets try to accommodate growth.
Houston joined other cities like Boston and Sydney as New World City challengers. These cities offer significant cost advantages over Established World Cities, with premium rents of $55, $73 and $60 per square foot, respectively. In comparison, premium offices in Established World cities like London and New York demand $240 and $171 per square foot, respectively.
The report highlighted office occupancy costs across 24 cities of various function and evolution. The tracker includes the key elements of occupancy costs such as effective rent, service charges and property tax, all of which were standardized to enable true international comparisons.
To download the full report and see exactly how Houston stacked up against other cities, click here.