By: Andrew Batson, Senior Research Analyst at JLL
Are you an investor curious about market outlooks, or a tenant approaching lease expiration? Well, I have good news. The annual Skyline Review is back.
Each year, JLL’s research team analyzes the top North American skylines and gives investors and tenants alike a personal, up-close, look at some of the highest-profile commercial buildings and office towers in our cities. JLL notes, “These assets are the true drivers of leasing supply, demand, rents and development and serve as the building wish list for foreign and domestic institutional investors.”
The report provides a birds-eye view of local urban office markets, including both micro and macro-level statistics from floor-by-floor leasing to investment performance.
And now—for the first time ever—JLL is introducing the Digital Skyline.
The Digital Skyline includes building-by-building data. Simply click on a building to view class, average floor plate, total vacancy, rents, LEED certification and more. Or, leverage macro-market insights with interactive charts featuring overarching vacancy, net absorption, rents, and more.
What does this year’s Digital Skyline say about your city? Following are highlights from the Cincinnati, Cleveland, Columbus, Detroit and Pittsburgh Skyline Reviews, with links to view the complete Skyline.
The Cincinnati Skyline
Recent announcements have promised job growth in the Queen City, including GE’s planned construction of its new 339,000-square-foot global operation center and Cincinnati Bell’s consolidation into 220,000-square-feet in Atrium Two. As a result, thousands of jobs are projected to open up in the coming years.
Though asking rents dipped slightly this year, tightening market conditions are expected to increase rent growth. The year is off to a strong start in Cincinnati, with lively capital markets activity and roughly 60,000-square-feet of net absorption.
Visit the 2015 Digital Cincinnati Skyline.
The Cleveland Skyline
Leasing activity was fairly active in Cleveland during 2014. However, since most tenants were focused on right-sizing and increasing efficiencies, Cleveland’s vacancy is forecasted to increase to 24 percent by the end of the year.
Three primary tenants, Key Bank, Baker Hostetler, and Deloitte, all cut back in the last 18 months. In total, this led to a cut back of 283,000-square-feet. A handful of tenants in the 40,000-square-foot range, including Dix & Eaton, McKinsey & Company, and Penton and Marsh, also downsized by approximately 50 percent.
Visit the 2015 Digital Cleveland Skyline.
The Columbus Skyline
With about 240,000 square feet of positive net absorption, the capital city experienced “stellar” growth in 2014, according to the Skyline Review. This included Columbia Gas’ move into a new 280,000-square-foot headquarters in the Arena District.
Though the first quarter of this year saw a slight decrease in net absorption, investor demand is still rising. Daimler Group and Kaufman Development recently announced plans to construct Two25 Commons, a mixed-use, 17-story high-rise featuring retail, residential and Class-A office space.
Visit the 2015 Digital Columbus Skyline.
The Detroit Skyline
According to the report, Detroit’s occupancy gains have outpaced primary markets Houston, Boston and Washington D.C., as well as most secondary markets in the U.S.
What’s more, JLL forecasts 100,000 square feet in demand growth per year through 2017. With vacancy dipping below 10 percent, a common threshold for development, downtown Detroit may look forward to new office construction and significant growth in the short future.
Visit the 2015 Digital Detroit Skyline.
The Pittsburgh Skyline
Pittsburgh’s Skyline has claimed one of the lowest vacancy rates in the U.S. over the past four years. This, however, is expected to change.
Vacancy will first tick up in early 2016 when construction wraps up on the speculative 128,000-square-foot Tower Two-Sixty. Vacancy will further escalate in 2017 and into 2018 when BNY Mellon consolidates its operations in the region, eventually surrendering more than 600,000 square feet at 525 William Penn Place. Finally, by 2018, U.S. Steel will relocate to its new headquarters at the former Civic Arena site, leaving 470,000 square feet of available space at at 600 Grant Street.
Looking ahead, landlords in Pittsburgh will likely have leverage through 2017. Interested buyers will have their pick within a myriad of valuable available spaces.
Visit the 2015 Digital Pittsburgh Skyline.
About the Author
Andrew Batson is Senior Research Analyst for the Michigan and Ohio region of Jones Lang LaSalle and is responsible for the publication of quarterly and annual research. Mr. Batson ensures that our clients receive the most thorough, timely, and strategic market information in a way that guides decision-making and identifies risks and opportunities. View Andrew’s bio or connect with Andrew on LinkedIn.