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Colliers' Q4 2015 Office Report Points to Continued Momentum in the Year Ahead


A Dynamic 2015 Points to Continued Momentum in the Year Ahead

Leading global commercial real estate services firm Colliers International Group Inc. (NASDAQ:CIGI, TSX:CIG) today released the 2015 Q4 U.S. Office Market Outlook 2015. 

Nearly 40% of the 80 markets Colliers tracks have vacancy rates at or below their pre-recession lows. In  addition, absorption in CBDs was the second highest since 2006, though it dipped modestly from 26.5 MSF in 2014 to 24.4 MSF in 2015. Meanwhile, the suburban total of 62.2 MSF was the largest total since 2006. The CBD asking rent ($49.24/SF) is the highest since the third quarter of 2008, and just under the peak of $49.99/SF reached the quarter before that. The $29.00/SF asking rent in the suburbs marks a new peak, eclipsing the $28.75/SF from the first quarter of 2008. On the investment side, cross-border investment fueled nearly 20% of the total volume in 2015, with over $25 billion in investment - surpassing the prior peak of $21 billion in 2006.

Key Observations:

  • Strong positive absorption fueled further gains in occupancy, with the fourth quarter totaling 27.3 MSF nationally – the highest figure in nine years. 
  • Moderate economic expansion continued in 2015. 
  • Strong growth in the technology sector has fueled office gains across the country by absorbing record volumes of space.
  • Leasing is also being fueled by large tenants executing leases well in advance of their current lease expirations, particularly in New York. 
  • Occupancy strengthened in 2015, with the national vacancy rate declining by 70 basis points, ending the year at 12.5%. 
  • Rents recorded some of their largest gains of this cycle in both CBDs and suburban areas. 
  • The office new construction pipeline continued to grow – up 11% this year to 106.6 MSF.
  • Investor demand for U.S. office properties continued to be robust throughout 2015, with capitalization rates dipping below 4% in some gateway markets. 
  • Looking further ahead in 2016, although valuations of newer, high-growth tech companies have begun to moderate, there will still be voracious demand, particularly by the “titans of Tech” such as Google, Apple, Facebook and Amazon.
  • Areas with the largest projected growth in employment and gross metro product (Orlando, Phoenix, Portland and Raleigh-Durham) will draw greater interest from investors looking for new opportunities or who have been priced out of core markets.

For more details, Colliers International’s 2015 Office research report is available for download at

photo:Elliot Golan
Elliot Golan
Director, Public Relations and Marketing
+1 206 695-4208
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