CBRE: Suburban Denver tops office occupancy cost increases

JLL market update

With a 17.2 percent increase year over year, suburban Denver was the fourth-fastest-growing market globally

Suburban Denver had the highest increase in prime office occupancy costs—which reflect rent, plus local taxes and service charges for the highest-quality, “prime” office properties—from first-quarter 2016 through first-quarter 2017 among the U.S. markets studied in CBRE Research’s latest annual Global Prime Office Occupancy Costs report.

In addition to topping the list domestically, suburban Denver’s growth rate of 17.2 percent year over year was the fourth fastest globally, trailing only Durban, South Africa (21.2 percent), Buenos Aires, Argentina (20.0 percent) and Stockholm, Sweden (18.8 percent). At 15.3 percent growth, suburban Houston was the second-fastest among U.S. markets, ranking No. 6 globally.

Overall, global prime office occupancy costs rose 1.9 percent year over year, with the Americas up 3.6 percent, EMEA up 0.8 percent and Asia Pacific up 1.2 percent.

“The average occupancy cost for suburban Denver’s highest-quality office properties is rising in large part due to a robust construction pipeline that is predominantly Class A or above. The delivery of new top-tier suburban office projects is leading to all-time-high lease rates across the board,” said Matt Vance, economist and director of research and analysis for CBRE in Colorado. “However, it’s important to note that while suburban Denver’s year-over-year change was significant, at a rate of $31.40 per square foot, the market is far from ranking among the most expensive worldwide.”

Hong Kong (central) and London’s West End remained the two most expensive office locations in the world. Hong Kong’s (central) overall prime occupancy costs of $303 per sf per year topped the “most expensive” list, followed by London’s West End $214 per sf, New York (Midtown) ($203 per sf), Hong Kong (West Kowloon) ($190 per sf) and Beijing (central business district ) ($183 per sf).

“The global top 10 list reflects the ongoing strength of global gateway cities in attracting and maintaining a successful occupier base,” said Richard Barkham, global chief economist, CBRE.

CBRE tracks occupancy costs for prime office space in 121 markets around the globe. Of the top 50 “most expensive” markets, 21 were in Asia Pacific, 16 were in EMEA and 13 were in the Americas.

Top 10 Most Expensive Markets

(In US$ per sf per annum)

Rank Market Occupancy Cost
1 Hong Kong (central), Hong Kong 302.51
2 London (West End), United Kingdom 213.85
3 New York (Midtown Manhattan), U.S. 202.79
4 Hong Kong (West Kowloon), Hong Kong 190.02
5 Beijing (CBD), China 183.10
6 Beijing (Finance Street), China 170.29
7 Tokyo (Marunouchi/Otemachi), Japan 161.76
8 New York (Midtown-South Manhattan), U.S. 156.19
9 New Delhi (Connaught Place – CBD), India 153.89
10 Shanghai (Pudong), China 133.82

Largest Annual Changes in Occupancy Costs

(In local currency and measure)

Top 5 Increases

Rank Market % Change
1 Durban, South Africa 21.2
2 Buenos Aires, Argentina 20.0
3 Stockholm, Sweden 18.8
4 Denver (suburban), U.S. 17.2
5 Palma de Mallorca, Spain 16.5


Top 5 Decreases

Rank Market % Change
1 Jakarta, Indonesia -19.6
2 Moscow, Russian Federation -18.0
3 Geneva, Switzerland -9.8
4 Hanoi, Vietnam -7.4
5 Calgary (Downtown), Canada -6.7



  1. The Global Prime Office Occupancy Costs report is a survey of office occupancy costs for prime office space in 121 cities worldwide.
  2. The latest survey provides data on office rents and occupancy costs as of March 31, 2017.
  3. The Largest Annual Changes rankings are based upon occupancy costs in local currency and measure. The Most Expensive ranking is based upon occupancy costs in US$ per sf per annum.
  4. The figures given in this release refer to occupancy cost. This represents rent, plus local taxes and service charges. The occupation cost figures have also been adjusted to reflect different measurement practices from market to market.
  5. Due to methodology changes, comparisons with figures in previously released reports are not valid.

Edited by the Colorado Real Estate Journal staff.