The office market is still trying to find its footing in a post-pandemic world, but prices in some areas of the country are faring better than others.
California dominated with more than half of the 50 priciest office submarkets in the nation during the fourth quarter of 2021, according to a CommercialSearch report of the priciest office markets by price per square foot last quarter.
Menlo Park, a San Francisco submarket, led the way with an average asking rent of $118.73 per square foot. It was one of only two submarkets with average asking rents above $100 per square foot, the other being the Plaza District in Manhattan, New York ($107.41 psf).
The Bay Area and San Francisco boasted four of the five most expensive office submarkets in the nation last quarter. In addition to Menlo Park’s perch, Mountain View West ranked third at an average of $95.64 per square foot, while Palo Alto finished fourth at $93.49. San Francisco’s Redwood City rounded out the top five at $92.50.
Of the 27 California submarkets to place in the top 50 of the report, exactly one-third of them were in San Francisco, while the Bay Area and Los Angeles boasted seven each; four submarkets in San Diego rounded out California’s contributions.
Manhattan had three of the top ten most expensive office submarkets of the quarter. Trailing the Plaza District was Chelsea, ranking sixth overall at an average of $84.67 per square foot, and Times Square-Hell’s Kitchen, seventh overall at $81.24.
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Manhattan claimed six of the top 50 spots overall and half of the Northeast region’s placements on the rankings. Other submarkets in the borough to rank in the top 50 include Gramercy Park ($62.99 psf), Murray Hill ($59.16 psf) and the Financial District ($56.26), the latter being the city’s lone representative outside of Midtown.
Other parts of the tri-state area were represented in the top 50 rankings, led by the Hudson Waterfront South in New Jersey ($56.52 psf). Other tri-state submarkets to crack the list include the Greenwich ($48.94 psf) and Stamford ($48.22 psf) submarkets, both in Connecticut.
Los Angeles placed one submarket in the top ten. Beverly Hills’ average office asking rent of $75.20 ranked ninth overall, sandwiched between Sunnyvale West in the Bay Area and San Francisco’s South Financial District. More Los Angeles submarkets to make the top 50 include Santa Monica ($66.43 psf), West Hollywood ($64.66 psf), Hollywood ($56.70 psf), Wilshire Corridor ($56.24 psf), West Los Angeles ($55.88 psf) and Culver City ($53.48 psf).
The South’s most expensive office submarket last quarter belonged to Brickell in Miami, asking an average of $68.52 per square foot. Florida placed three other submarkets in the top 50, including Hollywood, Fort Lauderdale ($48.63 psf), Fort Lauderdale’s central business district ($47.48 psf) and Coral Cables in downtown Miami ($47.04 psf).
Texas also made an appearance with three entries in the top 50: downtown Austin ($58.93 psf), south Austin ($49.66 psf) and the Uptown/Oak Lawn submarket of Dallas-Fort Worth ($46.47 psf).
CommercialSearch used data compiled in mid-February. Only submarkets with at least 10 properties and 20 listings for space last quarter were considered. Properties needed to be at least 25,000 square feet in size to count.