From JLL’s Q3 2014 U.S. office sentiment survey:
Markets across the country continue to recover and expand due to increased economic momentum, corporate confidence and thus higher levels of hiring
- 35 percent of markets responded saying that tenant activity in Q3 was driven by growth
- But 98 percent of markets indicate a preference for higher density overall by companies.
- The preference for creative space is leading landlords to make capital improvements to buildings (90 percent of respondents) and build-out spec suites (40 percent of respondents).
Increased leasing momentum and tighter fundamentals supporting increased investment sales activity
- Bidder activity in 75 percent of markets surveyed has increased since last year; 63 percent of markets surveyed responded that the number of assets for sale is increasing.
- It’s no surprise then that cap rates are compressing in 48 percent of markets surveyed, driven by institutional investors, followed by private developers and property companies.
- In 70 percent of markets surveyed, the increased capital is flowing to Core Suburbs, followed by Core CBDs (43 percent of respondents), a shift from recent quarters where CBD activity dominated.