With giants like Boston Properties (NYSE:BXP) and Google (NASDAQ:GOOG) buying skyscrapers in NYC, the appetite for office space seems to be on the rise in the U.S. as improved economic conditions nudge companies to expand.
Average effective rents, which include benefits such as free rent and interior work, climbed 0.5% to $22.20 a square foot during the first-quarter, according to the Wall Street Journal, citing data from property-research company Reis.
The increase was the second straight, though rents are still lower on average than they were at 2008 highs, when effective rates soared to $25 a square foot.
Of the 79 markets tracked by Reis, the two lowest vacancies were Washington D.C., at 9.2%, and New York City, with a rate of 10.7%. Detroit and Phoenix were tied for the highest vacancy rates of 26.6%, according to the Journal.
While the nation’s capital continues to benefit from law firms moving into the region, New York has been assisted by a variety of public corporations, including Google, which purchased a building in the city for $1.9 billion in December, and Boston Properties, which announced recently that it will start construction this year on a 40-story skyscraper in bought in 2009 for $1 billion.