Downtown offices in the United States achieved on average higher rents than suburban offices. In the fourth quarter of 2023, the annual quoted rent of Class A offices in downtown areas was 53.3 U.S. dollars per square foot, while for suburban offices it was 35 U.S. dollars per square foot. Despite a slight dip in 2021, office rents have overall increased from the historical average. Until 2027, office rents are forecast to grow slightly.

Rental rates in the United States increased steadily since 2008. In 2023, the producer price index for gross rent in office buildings reached 132.9 index points. This means that between 2008 when the index value was set to 100 and 2023, gross office rents grew by about 33 percent. Manhattan, San Francisco, and Boston are among the biggest and most expensive markets for office space in the United States.

In the third quarter of 2024, London (West End) was the market with the most expensive prime office space worldwide.The net effective cost for a prime office in London cost close to 287 U.S. dollars annually. In second and third market in the ranking, Hong Kong and Midtown New York, prices also exceeded 200 U.S. dollars per square foot. The global office real estate sector was severely affected by the coronavirus pandemic and the political and economic uncertainty that followed. With many companies placing expansion plans on hold and transitioning to hybrid working models, vacancies across many markets spiked and leasing activity slowed down.

Manhattan, NY, was the market where renting an office was most expensive in the United States in 2023. The average annual quoted square footage rent of office space was close to 80 U.S. dollars in the fourth quarter of the year. Only one other market - East Bay - came close to this rental rate. In Washington D.C., the market with the second-largest inventory of class A downtown offices, the annual rent amounted to approximately 59 U.S. dollars per square foot. Since the onset of the coronavirus pandemic, the office real estate sector has been suffering an increase in office vacancies, affecting both downtown and suburban properties.

Heredia experienced the highest average asking rent for class A offices in Costa Rica in the second quarter of 2023. Heredia reported an average monthly rent of 20 U.S. dollars per square meter. Downtown San Jose and West San Jose also had rents higher than the average for all markets observed. On the other hand, Alajuela offered the most affordable commercial office spaces with the lowest asking rent among all districts, coming in at just 18 U.S. dollars per square meter.

In Texas, Austin was the most expensive market for office space in the second quarter of 2024. The rental rate of class A offices was nearly 52 U.S. dollars per square foot, compared to 26 U.S. dollars per square foot for El Paso. Dallas, which is the largest office real estate market in the state, had rental rates of about 30.3 U.S. dollars for all classes and 35.7 U.S. dollars for class A offices. In the United States, Manhattan, San Francisco, and Silicon Valley-South Bay fetch the highest office rental rates.

Prime office rents in Central Paris are some of the highest in Europe. In 2024, the square meter rent of office space in Paris was 1,200 euros per year, up from 1,067 euros per square meter in 2023. In comparison, in 2013, office rents were 750 euros per square meter.

The Back Bay district was the most expensive real estate market for office space in Boston in the third quarter of 2024. On average, the average asking rent was about 69 U.S. dollars per square foot of office space. Downtown Boston, the market with the largest inventory of office space among Boston districts, had the second highest rent, at about 68 U.S. dollars. The gross rental rate usually includes costs for utilities and other general maintenance expenses.

The rental prices of prime office spaces per square meter varied greatly across different European cities in 2023, ranging from over 2,000 euros in London to 200 euros in Riga. Prime office properties typically meet specific criteria, including a good location in major commercial centers, public transport accessibility, and energy efficiency. Where in Europe are offices most expensive? London, England, had the most expensive prime office spaces with the West End, Marylebone, and Knightsbridge/Chelsea submarkets commanding the highest prices. Other European cities with high-end office rents included Paris, Milan, and Dublin. Where is the most office space leased? Larger cities with flourishing economies tend to attract most businesses despite higher office space costs. Therefore, it is unsurprising that Germany's big Four (Berlin, Munich, Frankfurt, and Hamburg), Paris, and London had the highest take-up rates for office spaces across Europe. In Berlin and Luxembourg, the share of vacant office space was less than four percent.

In the first quarter of 2024, the average monthly rent for grade A office space in Hong Kong's Central district amounted to 954 Hong Kong dollars per square meter. Central had the most expensive office real estate among all districts in the city. Compared to other major cities in the Asia-Pacific region, Hong Kong had the highest average rent for grade A office real estate.

San Francisco's office rental market showcases significant variation across its submarkets, with Mission Bay commanding the highest rates at 138 U.S. dollars per square foot in the third quarter of 2024. This premium location demanded nearly double the city's average rate, highlighting the stark differences in desirability and demand within the city's commercial real estate landscape. Economic powerhouse The San Francisco Bay Area's economic prowess is evident in its impressive economic growth over the past 20 years. The city's strength is fueled by the presence of major technology companies and a thriving startup ecosystem. The region's economic significance extends beyond local boundaries, contributing substantially to California's position as the state with the highest GDP in the country. This economic vitality helps explain the sustained demand for office space across various San Francisco submarkets. Offices: global context and market trends In a global context, San Francisco's office rental rates are relatively high but not the most expensive worldwide. In 2024, London, Hong Kong, and New York emerged as the top three most expensive office rental markets globally. Over the past five years, San Francisco has experienced a decline in office rents. This trend aligns with broader shifts in the office real estate sector, influenced by the COVID-19 pandemic and the rise of hybrid work. Despite these challenges, certain San Francisco submarkets like Mission Bay and The Presidio continue to command premium rates, reflecting their enduring appeal to commercial tenants.

In the first half of 2023, Mumbai remained to be the most expensive city for rental office space in India, at a monthly rate of 111 Indian rupees per square feet. In the city of Hyderabad, the costs for office space rent remained stable at a much lower price than in Mumbai.

In 2023, Frankfurt and Munich were the German cities with the highest prime rents for office real estate, but Berlin had the highest average rent. In Munich, the prime office rent amounted to 48 euros per square meter, while the average rent was twice lower, at 23.85 euros per square meter. Prime rents refer to the top price segment in the market, usually buildings in the most desired locations and of the highest specifications.

In Turkey, the average monthly rental rates of class A office properties in Istanbul mostly increased in the observed period between the second quarter of 2014 and the second quarter of 2024. From the second quarter of 2021, the asking rents for these offices have been soaring. As of the second quarter of 2024, the rental rates reached a record value of 904 Turkish lira per square meter.

The average asking rent for Class A office space in Midtown Manhattan was 82.74 U.S. dollars per square foot in the first quarter of 2024. It was above the Manhattan average of 80.38 U.S. dollars, but below that of Midtown South, which was the most expensive district at 103.42 U.S. dollars per square foot. What is Class A real estate?Class A real estate refers to the best properties in terms of appearance, age, quality of infrastructure and location. These properties usually command the highest rental rates, due to their high quality. In the U.S., Manhattan has the most expensive rents for Class A offices.Midtown vs Midtown SouthMidtown Manhattan contains the Empire State Building, MoMA, Grand Central Station, and the United Nations Headquarters. The most expensive submarket there was Plaza District in 2024. Meanwhile, Midtown South is home to Madison Square Garden, Pennsylvania Station, Hudson Yards, and Koreatown. In 2024, the most expensive submarket there was Hudson Yards, followed by Chelsea and Hudson Square.

Washington DC was the most expensive major city for office space, among those being considered for Amazon’s second headquarters, in the United States in 2017. Tenants paid, on average, 595 U.S. dollars per square foot for office space in that city, compared with 550 U.S. dollars and 486 U.S. dollars per square foot in Boston and Austin respectively.   Why is Washington DC so expensive? The GDP of the Washington metro area has steadily risen since 2001, which indicates that the economy is growing. This is not surprising, because it is the capital of the United States and, consequently, its political epicenter. All three branches of government, nearly 200 foreign embassies and several international organizations - such as the IMF, the World Bank and the National Geographic Society - are located there, which also means that it’s the logical place for lobbying firms and many financial services companies to operate from.

Further growth expected in Washington DC The future of the office real estate market in Washington DC looks promising, due to its political importance and strong economy. Office rents are forecast to grow by almost six percent by 2021, which is impressive given how high they already are. However, vacancy rates are also set to rise in the area, which means that more available office units will be unoccupied.

The center of Amsterdam and the South Axis yielded the highest square meter rents for offices in the Netherlands in the first quarter of 2023, followed by Amsterdam Center and Amsterdam West. In Amsterdam Center, the annual rent was between 225 and 500 euros per square meter, whereas in Amsterdam South Axis, it was between 275 euros and 550 euros. In Rotterdam Center, rental rates ranged between 160 euros and 265 euros.

The office rent index value in Singapore in the 4th quarter 2024 was 200. The index values represent the change of office rent price from the base year of 1998. By Q4 2024, the office rent index had increased by 100 percent compared to the base year.

The statistic shows the cost comparison between flexible and conventional office renting in the Asia Pacific region in 2018, broken down by city. In that year, the average annual rent rate for flexible workspaces in Hong Kong amounted to around 7.61 thousand U.S. dollars per desk while the annual rent rate for conventional workstations was at approximately 27.43 thousand U.S. dollars, indicating a price difference of about 72 percent.

The average monthly office rent per tsubo in Tokyo's central business districts amounted to around 20.3 thousand Japanese yen in December 2024. In July 2020, the average rent reached a peak of 23 thousand yen. Low office vacancy rates in Japan’s metropolitan areas prior to the pandemic In the years before the coronavirus pandemic, increasing rents for office space reflected a general downward trend in vacancy rates for office space in Tokyo's central business districts; Chiyoda, Chuo, Minato, Shinjuku, and Shibuya. Similarly, office vacancy rates in Osaka and other major cities in Japan were also declining steadily. Increasing commercial land prices in the metropolitan areas of Tokyo, Osaka, and Nagoya accompanied this development. Real estate investment in office property With an increasing demand for office space and rising rents, the office market played a growing role in commercial real estate investment. Office property has been among the leading types of property in the portfolios of Japanese real estate investments trusts (J-REITs) and accounted for around one-quarter of securitized properties in Japan.