In addition to the housing market in the United States going through recovery mode, there are certain areas that are now in high demand for office space. However, the goal for business owners is getting into some of these hot areas without spending a fortune. For instance, commercial property in Washington DC, New York City, and San Francisco are hard to find because of popularity but these areas are also high dollar.
Benefits of Hot Areas for Office Space
The good news is that there are still plenty of office space areas that are ideal for businesses of all sizes and types but without being overpriced. Some examples include Raleigh-Durham, Salt Lake City, Denver, and Nashville. One of the primary benefits is that in these and a few other areas, rental rates are around $0.35 less than the average rate in the US.
In addition, these particular cities have a high return on investment with cap rates, otherwise known as income returns that range anywhere from 5.5 percent to 7.5 percent. All of these markets are growing and according to experts like Stephen Collins with America Capital Markets, will become extremely attractive to millennials, as indicated to Realtor Magazine.
Four Hottest Office Space Areas
Below are the four hottest areas for office space to consider:
- Raleigh-Durham, North Carolina – Since 2010, this area has experienced a 7 percent growth in population. As such, it has outpaced a number of other markets to include Dallas and Houston. In relation to business and professional services, the job growth is up 30 percent over the past three years. This area is also 50 percent above the national average for the number of college educated people. Currently, office employment is 26 percent of total employment or 281,000 and for vacancy rate, this is now at 12.8 percent.
- Salt Lake City, Utah – This is another hot area for office space, which has a vacancy rate of 11.7 percent. One of the biggest corporations is Goldman Sachs, which over the past decade has built its home base in Salt Lake City. Today, this company alone employs almost 2,000 people. For office employment, it is at 27 percent of total employment, which equates to 185,000.
- Denver, Colorado – Famously known as “the mile high city”, Denver is not only a beautiful place to live but it currently has office employment at 29 percent of total employment or 348,100, as well as a vacancy rate of 14.1 percent. While there are many great places for office space in Denver, the newly renovated Union Station has become “the hub”. This is a diverse city with incredible growth for a number of sectors to include business and professional services, technology, and biotech.
- Nashville – As the musical capital, Nashville is another hot spot for office space. The job market is sound, especially for healthcare and education, which account for more than 15 percent of all jobs. For office employment, the rate is 25 percent of total employment or 208,100. With the new $200 million Bridgestone America headquarters being built, over 1,700 workers will come to the Nashville area.