2013 Annual Market Forecast Global Market Forecast & Outlook Electronic Arts HQ, Redwood City, CA 17 January 2013.
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2013 Annual Market ForecastGlobal Market Forecast & Outlook
Electronic Arts HQ, Redwood City, CA
17 January 2013
Top 10 Worldwide Top 10 USA
1. Whitney Houston 1. Whitney Houston
2. Gangnam Style 2. Hurricane Sandy
3. Hurricane Sandy 3. 2012 US Election
4. iPad 3 4. Hunger Games
5. Diablo 3* 5. Jeremy Lin*
6. Kate Middleton 6. Olympics 2012
7. Olympics 2012 7. Amanda Todd
8. Amanda Todd* 8. Gangnam Style
9. Michael Clarke Duncan* 9. Michael Clarke Duncan
10 BBB 12* 10. KONY 2012*
Perspective - Top 10 Google Searches for 2012
Source: http://www.google.com/zeitgeist/2012/#the-world
5
• EMEA – Dr. Lee Elliott– Head of EMEA Research, Jones Lang LaSalle
• APAC – Mr. Hans Vrensen– Global Head of Research, DTZ
• Americas – Ms. Brook Scott– Head of Americas Occupier Research, CBRE
• San Francisco Bay Area – Ms. Maria Sicola– Executive Managing Director of Research, Cushman &
Wakefield
• Moderator – Mr. Sven Pole– Executive Vice President, Global Corporate Services, CBRE
Speakers & Agenda
6
• Macroeconomic Indicators By Region• Labor Market Outlook By Region • Commercial Office Markets
– Supply/Demand– Vacancy vs. Net Absorption– Rental Rates– Market Cycles
• Market Strategies & Opportunities• Key Trends in 2013
Format of Presentations
Macro Economic Indicators By Region
< 0%
0.0 – 0.9%
1.0 – 1.9%
2.0 – 2.9%
> 3.0%
1.0%
0.5%
1.2%
-2.0%
-0.5%
3.4%
4.2%
1.1%
2.4%
1.0%
0.7%
0.8%
0.8%
0.4%
Source: Consensus Economics, October 2012
0.5%
-2.0%
2.0%
-3.4%
1.0%
1.8%
2.5%
GDP Growth Forecast 2013
Macro Economic Indicators By Region
Sudden recovery (10%)
Muddling along (60%)
Disorderly deterioration (30%)
(but nightmare case <10%)
Plus ça change – Eurozone crisis is still key threatSome improvements, but underlying problems remain
Labor Market Outlook By Region
Source: European Commission, November 2012
Fragile corporate confidence persists
Labor Market Outlook By Region
-2
-1
0
1
2
3
4Sp
ain
Czec
h Re
publ
ic
Russ
ia
Irela
nd
Euro
zone Italy
Neth
erla
nds
Euro
pean
Uni
on
Belg
ium UK
Fran
ce
Finl
and
Ger
man
y
Swed
en
Pola
nd
Hung
ary
Turk
ey
2001-11 2012-13 2014-16Source: Oxford Economics
Office Markets – Supply / Demand
-1,000
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
Q3
2000
Q3
2001
Q3
2002
Q3
2003
Q3
2004
Q3
2005
Q3
2006
Q3
2007
Q3
2008
Q3
2009
Q3
2010
Q3
2011
Q3
2012
CEEWestern EuropeTotal
in ‘0
00 s
q m
Source: Jones Lang LaSalle, October 2012
Net absorption positive but moderate through 2012
Office Market – Vacancy vs. Absorption
2005 2006 2007 2008 2009 2010 2011 2012 (F)
2013 (F)
2014 (F)
2015 (F)
0
2000
4000
6000
8000
10000
12000
14000
0
2
4
6
8
10
12
Completions (000 sq m) Take-up (000 sq m) Vacancy Rate (%)
Take
-up
/ Com
plet
ions
(000
sq
m)
Vaca
ncy
Rate
%
Completion volumes weak, forecast to improve but with downside risk
Office Market – Vacancy vs. Absorption
21.519.4
15.815.6
13.913.313.113.1
11.911.411.311
10.710.710.7
8.68.48.18.17.9
65.354.9
4.1
0 5 10 15 20
BudapestDublin
RotterdamAmsterdamBarcelona
MoscowFrankfurt/M
UtrechtPragueMadrid
DusseldorfThe Hague
BrusselsMilan
StockholmMunich
BerlinHamburg
WarsawLondon-CityLuxembourg
Paris-LDFParis-CBD
LyonLondon-WE
Q3 2012 (%) Q4 2014 (%)
14.918.5
16.214.6
13.512.5
14.313.0
10.99.8
12.613.5
10.112.0
9.38.3
9.08.28.5
4.64.5
8.94.45.0
3.3
0 5 10 15 20
BudapestDublin
RotterdamAmsterdamBarcelona
MoscowFrankfurt
UtrechtPragueMadrid
DusseldorfThe Hague
BrusselsMilan
StockholmMunich
BerlinHamburg
WarsawLondon-CityLuxembourg
Paris-LDFParis-CBD
LyonLondon-WE
-660-90
40-100
-40-80
120-10
-100-160
130250
-60130
-140-30
6010
40-330
-150360
-6010
-80
-1000 -500 0 500
Source: Jones Lang LaSalle, October 2012
Europe 9.7% Europe 9.5%
Office Market – Rental Rates
Source: Jones Lang LaSalle IP, October 2012
Lond
on-W
E
Mos
cow
Paris
Lond
on-C
ity
Stoc
khol
m
Mila
n
Rom
e
Fran
kfur
t/M
Ista
nbul
Amst
erda
m
Kiev
Dubl
in
War
saw
Mad
rid
Brus
sels
Prag
ue
Buda
pest
Buch
ares
t
Lisb
on
Barc
elon
a
0102030405060708090
100 13%
8%15%
20%
0%
17% 13%13%
5% 22% 7% 12% 16% 17% 10% 12% 16%7% 4% 17%
Effective Rent Prime Rent % = Average Incentives as % of Prime Rent
Rent
U
S$/ ft
² pa
Prime Rents & Effective Rents 2012 Q3
Office Market – Rental RatesWestern EuropeCentral and Eastern EuropeMiddle East and Africa
Johannesburg, Luxembourg Lisbon, Newcastle, Rome, Belgrade
Budapest, MadridBarcelona, Brussels, Dublin, TunisBirmingham, Bristol, Cardiff, Edinburgh, Frankfurt, Glasgow, Leeds, Malmo, Istanbul, Dubai, Kiev, Tri-City, Bucharest, Bratislava, Prague
Manchester
Western Corridor
Krakow
Munich
Abu Dhabi, Doha, Muscat, Riyadh
Kuwait City, Zagreb
Stockholm, Düsseldorf, Moscow
Antwerp, Athens, Nottingham, Jeddah, Cairo, Manama
Gothenburg Southampton, Liverpool
Copenhagen
Berlin, Cologne, Lyon, Casablanca
Amsterdam, Eindhoven, Geneva,Rotterdam, The Hague, Utrecht
Oslo, Stuttgart, Rabat
Paris CBD, London West End
Rental GrowthSlowing
RentsFalling
Rental GrowthAccelerating
RentsBottoming Out
Milan
Algiers
Hamburg
Warsaw
Tel Aviv
Zurich
Helsinki, London City
Source: Jones Lang LaSalle IP, October 2012
Office Market – Market Cycles2013 2014 2015
Amsterdam
DublinFrankfurt London City
London West EndMadrid
MilanMoscow
Paris CBDPragueStockholm
Warsaw
Balanced Market Conditions
Tenant Favourable Market Conditions
Landlord Favourable Market Conditions
Market Strategies & Opportunities
1. Raising the productivity of people and places as well as managing cost
2. Leveraging technology and analytics to enhance decision making / strategy
3. Securing scarce investment capital from within the business
4. Attracting and retaining talent
5. Managing mobility – functional and worker mobility
Key Trends in 2013
Confidence to steadily rebuild over H1. Selective strategic investment in H2 including M&A
Enhancing productive through transformation. Selective platform building esp Africa
Moderate though improving in H2 and tipping market conditions away from occupiers
Polarised supply side with acute lack of transformative space and no respite from the pipeline
1st movers protected from significant rental uplifts. Laggards hit hard. It’s about more than rents
Operating Environment
CRE Agenda
Competition
Choice
Cost
• Global economic overview• Asia Pacific market update• Downside scenario analysis• Conclusions
Contents
Asia Pacific keeps going, but mind the range
Source: Oxford Economics
0% 2% 4% 6% 8% 10%
Eurozone
USA
Asia Pacific
Japan
Australia
Taiwan
South Korea
Malaysia
Hong Kong
Thailand
Singapore
Indonesia
India
China
Q4 2011 forecast Q4 2012 forecast
Real GDP
-1.0% 0.0% 1.0% 2.0% 3.0%
Eurozone
USA
Asia Pacific
Japan
Australia
Taiwan
South Korea
Malaysia
Hong Kong
Thailand
Singapore
Indonesia
India
China
Q4 2011 forecast Q4 2012 forecast
EmploymentAverage GDP and employment growth by country
Probability of multiple EU exit at highest level ever
Source: Oxford Economics
10%
5%
45%
50% 10%
15%
10%
20%
5%
10%
20%
Jan 12
Apr 12
Jul 12
Oct 12
Corporate Reawakening Base Case Fiscal CliffOil Price Spike China Hard Landing Greek ExitMultiple Eurozone Exit
Estimated scenario probabilities
Downside scenario will have lasting impact on all regions
Source: Oxford Economics
-1%
0%
1%
2%
3%
4%
5%
6%
EU27 USA APAC
Upside Base Case Downside
Average GDP growth 2013-17
Low government bonds yields mean low hurdle rate for property
Source: Oxford Economics
0%
2%
4%
6%
8%
10%
12%
14%
16%
Italy (base case) US (base case) Japan (base case)Italy (downside) US (downside) Japan (downside)
10 year government bond yield
Italy
Italy
USUS
Japan
Selected government bond yields
Risk appetite remains strong for corporate bond yields
Source: Bloomberg
0%
2%
4%
6%
8%
A BBB*
USA EUROZONE Japan
(*Not available for Japan)
Composite corporate bond yields
Cost savings across the board in downside scenario
Source: DTZ Research
-2%
0%
2%
4%
6%
8%
10%
Europe USA APAC Global Average
Downside Base Case Upside Average Inflation Rate, Base Case
Regional prime rental growth, base case and scenarios, (2013-14 pa)
• Global economic overview• Asia Pacific market update• Downside scenario analysis• Conclusions
Contents
HangzhouQingdao
Gold Coast Xi’anSydney Bangkok
Taipei
BeijingBrisbane
ChongqingPerth
ShanghaiShenzhen
Tianjin
BengaluruChennai
DelhiPune
HyderabadKuala Lumpur
Melbourne
Rent falls Rent rises
SingaporeChengdu
Ho Chi Minh CityNanjing
GuangzhouHong Kong
More volatile marketsLess volatile markets
1
Mumbai KolkataShenyang
DalianJakartaSeoul
DTZ Rental wave APAC
Strong rental growth in many developing markets
Source: DTZ Research
Asia Pacific the only region with above inflation growth in occupancy costs
Source: DTZ Research/Oxford Economics
-8%
-6%
-4%
-2%
0%
2%
4%
6%
North America
Central & South
America
Europe Global average
occupancy costs
Middle East & Africa
Global inflation average
Asia Pacific
2011 2012
Growth in total occupancy costs per workstation 2011-2012 (in USD)
• Global economic overview• Asia Pacific market update• Downside scenario analysis• Conclusions
Contents
Asia Pacific well placed to deal with negative impacts of Euro breakup
Source: DTZ Research
-2%
0%
2%
4%
6%
8%
10%
Base Case Multiple Eurozone Exit Corporate Re-awakening
Annualised GDP growth 2013-2017
-2 %
0 %
2 %
4 %
6 %
8 %
1 0 %
1 2 %
-2%
0%
2%
4%
6%
8%
10%
12%
Base Case Multiple Eurozone Exits Corporate Re-awakening
Downside scenario chart on Asia Pacific office rents
Source: DTZ Research
Annualised rental growth 2013-17
-5% 0% 5% 10% 15% 20% 25%
Kuala Lumpur
Bangkok
Singapore
Seoul
Taipei
Sydney
APAC
Delhi
Shanghai
Beijing
Tokyo
Hong Kong
Jakarta
Downside Base Case Upside
Where downside offers opportunities?
Source: DTZ Research
Annualised change in occupancy costs (2012-2014)
• Global economic overview• Asia Pacific market update• Downside scenario analysis• Conclusions
Contents
• The probability of multiple Eurozone exits is higher than ever, despite this we think that property market risks have been over estimated by occupiers
• Asia Pacific occupiers are expected to benefit from more affordable occupancy per workstation costs compared to western markets
• Indian and second tier Chinese markets will remain amongst the most affordable markets in the region, despite forecasts rental growth coming
Key views for 2013
41
Macro Economic Indicators By Region
(Real GDP, Annual % Change)
Asia-Pacific Latin America World United States Canada0%
1%
2%
3%
4%
5%
6% 2012 2013
Source: IHS Global Insight, December 2012
U.S. Labor Market Outlook
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014-6
-5
-4
-3
-2
-1
0
1
2
3
4
0%
2%
4%
6%
8%
10%
12%
US Net Jobs (Millions), Left-Hand Side
Source: IHS Global Insight, December 2012
Canadian Labor Market Outlook
Source: IHS Global Insight, December 2012
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014-300
-200
-100
0
100
200
300
400
500
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
Canada Net Jobs (1000s), Left-Hand SideUnemployment Rate, Right-Hand Side
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015-2%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
0%
2%
4%
6%
8%
10%
12%
14%
16%
Real GDP Growth, Left-Hand Side
Latin American Economic Outlook
Source: IHS Global Insight, December 2012
US Office Market – Supply / Demand
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014-60,000
-40,000
-20,000
0
20,000
40,000
60,000
80,000
100,000
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Completions (SF x 1000) Net Absorption (SF x 1000) Vacancy Rate (%)
Source: CBRE EA, Q3 2012
(SF x 1000) (Vacancy Rate)
Canada Office Market – Supply / Demand
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (4,000)
(2,000)
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
0%
2%
4%
6%
8%
10%
12%
14%
16%
Completions (SF x 1000) Net Absorption (SF x 1000)
Source: CBRE Research, Q3 2012.
(SF x 1000) (Vacancy Rate)
Latin America Office Market – Supply/Demand
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130
200
400
600
800
1,000
1,200
1,400
0%
2%
4%
6%
8%
10%
12%
14%
16%
Completions (SF x 1000) Change in Occupied Space (SF x 1000)
(SF x 1000) (Vacancy Rate)
Source: CBRE Research, Q3 2012.
Prime Office Occupancy Costs
Sao
Paul
o
Rio d
e Ja
neiro
New Y
ork
(Mid
town
Man
hatta
n)
Carac
as, V
enez
uela
Was
hing
ton,
DC (D
ownt
own)
San
Fran
cisco
(Dow
ntow
n)
Bosto
n (D
ownt
own)
Los Ang
eles
(Sub
urba
n)
New Y
ork
(Dow
ntow
n Man
hatta
n)
Bogot
a, C
olom
bia
Calga
ry (D
ownt
own)
Toro
nto
(Dow
ntow
n)
Vanco
uver
(Dow
ntow
n) $- $20 $40 $60 $80
$100 $120 $140
Source: CBRE Research, Q3 2012.
(US$/sq. ft./annum)
Largest Annual Prime Occupancy Cost Increases
Source: CBRE Research, Q3 2012.
(Annual Percent Change, Americas (Q3 2012)
Sao Paulo, Brazil
Boston (Suburban), U.S.
New York (Downtown Manhattan), U.S.
Houston (Downtown), U.S.
Houston (Suburban), U.S.
Denver (Downtown), U.S.
Vancouver (Downtown), Canada
Calgary (Downtown), Canada
Panama City, Panama
Boston (Downtown), U.S.
Lima, Peru
Calgary (Suburban), Canada
Seattle (Suburban), U.S.
San Francisco (Peninsula), U.S.
San Francisco (Downtown), U.S.
0% 5% 10% 15% 20% 25% 30% 35% 40%
• Continued focus on reducing overall office footprint
• Emphasis on collaborative space• Use of amenities to attract and retain workers• Importance of tech-enabled space• Sustainability focus: “healthy” building
materials
Market Strategies & Opportunities
• Fate of North American office markets inextricably tied to political outcomes
• Fewer opportunities to negotiate favorable lease terms
• Accelerating rent growth – Downtown • Focus on workplace strategies
Key Trends in 2013
San Francisco Bay AreaMs. Maria Sicola - Executive Managing Director of Research, Cushman & Wakefield
54
• Bay Area is the Epicenter of Technology– Since the late 1950s (founding of Fairchild Semiconductor) through 2012 (Facebook
now has one billion active users)
• The West Coast Business Center for Traditional Industries– Finance and law
• Highly Skilled and Educated Workforce– Large concentration of research labs and top universities in the world (Stanford, UC
Berkeley, Santa Clara)– Highly educated workforce – Job recovery outpacing nation
• Largest amount of venture capital invested in the U.S. • Housing Stabilizing• Quality of life
– Great cultural institutions, entertainment venues, restaurants – Natural setting
Macro Economic Indicators By Region
Silicon Valley /
Bay Area40%
New England 13%NY
Metro 8%
LA/Or-ange
County 7%
Midwest 7%
San Diego
4%
Southeast 4%
DC/Metroplex 3%
Northwest
3%
Other11%
Venture Capital Investments by Region
Total Invested: $2.6 billion
Total # of Deals 268 deals
% Breakdown by Industry
Software 43.6%
IT Services 13.9%
Biotechnology 12.1%
Computers & Peripherals 5.8%
Media and Entertainment 5.3%
Semiconductors 3.5%
Financial Services 3.0%
Other 12.8%
VENTURE CAPITAL FUELS LEASING
Macro Economic Indicators
SOURCE: : PRICEWATERHOUSECOOPERS MONEY TREE REPORT, THIRD QUARTER 2012
Total Office-Using0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
140.0%
160.0%
54.7%
65.9%
88.4%
116.1%
US San Francisco Oakland Silicon Valley
Labor Market Outlook
Note: US Trough=February 2010San Francisco Trough=February 2010
20.4%
99.4%
3.6%
139.5%
SOURCE: US BUREAU OF LABOR STATISTICS
Labor Market Outlook By Industry Sector
SOURCE: US BUREAU OF LABOR STATISTICS
Office-U
sing
Profes
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es-505
101520253035 31.9
25.8 24.6
13.9
7.8 6.6 5.71.0 0.5 0.2
-0.5 -1.6
Thou
sand
s of P
erso
ns
Office-U
sing
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ch
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10152025303540 34.2
26.420.3
15.2 12.78.8 6.3 4.8 3.0 1.2 0.6
-3.5
Thou
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-0.2 -0.8-2.4
-3.5-5.0
Thou
sand
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erso
ns
OAKLANDSAN FRANCISCO
SILICON VALLEY
Total Change +63,800 Total Change 20,200
Total Change +72,500
Accounting; 2.7%
Advertising / Media; 6.5%
Architecture / Engineer-ing; 6.2%
Business Services; 4.3%
Communications; 0.4%
Construction / Real Estate; 2.7%
Education; 1.4%
Energy ; 1.4%
Environmental; 0.7%
Financial Services; 5.2%
Government; 0.5%
Insurance; 1.1%
Legal Services; 8.8%
Medical / Healthcare; 1.9%
Non-Profit; 1.0%
Other; 5.7%
Software / Technology; 49.3%
4,565,000 Square Feet of Total Active Tenant Requirements
San Francisco Office Market – Current Tenant DemandBy Industry Sector
Q4 Q4 YoY
2011 2012 Growth (%)
Tech Index $49.26 $51.89 5.3%
“Class A Tech” $50.70 $52.83 4.2%
“Prime Creative Tech” $44.16 $50.14 13.5%
Q2 2012
TECH INDEX: tracks a distinct set of buildings that have the highest concentration of tech firms in San Francisco. While this index does not include all buildings occupied by tech users, it does differentiate between “Class A Tech” buildings and “Prime Creative Tech.”
“PRIME CREATIVE” space, defined as historic and/or brick & timber construction that has undergone a major retrofit within the past 15 yrs, currently consists of 37 buildings with a total inventory of 4.5 msf.
“CLASS A TECH” is defined as traditional class A, mid- and low-rise office space that has been modified to accommodate technology and creative users in a non-traditional office environment. Features often include design elements such as exposed ceilings and duct-work and indirect lighting.
San Francisco Office Market – Rent Comparisons
San Francisco Office - Vacancy Rate Vs. Rental Rates
SOURCE: CUSHMAN & WAKEFIELD RESEARCH
$0.00
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
$3
3.4
8
$2
7.6
0
$2
6.1
6
$2
5.9
2
$3
0.7
2
$3
3.3
6
$4
0.1
8
$4
3.5
5
$3
1.2
8
$3
2.5
2
$4
1.3
2
$5
0.3
2
$5
3.0
9
$5
6.3
0
Asking Rental RateFORECAST
Silicon Valley Office - Vacancy Rate Vs. Rental Rates
SOURCE: CUSHMAN & WAKEFIELD RESEARCH
$0.00
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
$4
0.2
0
$2
9.4
0
$2
4.0
0
$2
3.8
8
$2
3.6
0
$2
4.8
4
$3
0.6
7
$3
1.9
9
$2
8.2
8
$2
7.9
5
$2
6.7
0
$2
9.3
5
$3
0.3
8
$3
1.7
3
Asking Rental Rate FORECAST
Recovering
LAN
DLO
RD F
AVO
RABL
E
Rent growth acceleratingIdeal for owners of property
Rent at or near bottom of market cycle. Ideal for tenants leasing or seeking to lease property
Rent still elevated but falling from top of market cycle. Falling rents promise future opportunity for tenants
Rent growth slowing. Still landlord favorable but growth is down from peak
TEN
ANT
FAVO
RABL
E
Slow Growth Accelerating
Downturn
San FranciscoMidtown South
Orange County, Jacksonville
San Diego, Los Angeles, Miami, Sacramento
Portland
Palm Beach
HoustonMidtown Manhattan
Downtown NY
Dallas, Fairfield CountyWestchester County
Atlanta, Baltimore
Oakland
Hartford, Tampa
Washington DC
Orlando, Ft. LauderdaleChicago
Boston
DenverNew Haven
US CBD Office Rent Cycles(Q3 2012)
SOURCE: CUSHMAN & WAKEFIELD RESEARCH
LAN
DLO
RD F
AVO
RABL
ETE
NAN
T FA
VORA
BLE
Recovering
Slow Growth Accelerating
Downturn
San Francisco
Silicon Valley
Jacksonville, Miami, Sacramento
Northern NJ, Orlando, Atlanta
Ft. Lauderdale
Phoenix, San Diego, Tampa
Denver
New Haven, BostonChicago, Philadelphia
Long Island, Hartford
Los Angeles, Contra CostaPalm Beach, Central NJ
San Diego, Southern NHOakland, Inland Empire, Dallas, Portland
Fairfield County
Northern VA
Westchester County
Orange County
St. PetersburgSuburban MD Houston
San Francisco PeninsulaBaltimore
US Suburban Office Rent Cycles
SOURCE: CUSHMAN & WAKEFIELD RESEARCH
(Q3 2012)
Rent growth acceleratingIdeal for owners of property
Rent at or near bottom of market cycle. Ideal for tenants leasing or seeking to lease property
Rent still elevated but falling from top of market cycle. Falling rents promise future opportunity for tenants
Rent growth slowing. Still landlord favorable but growth is down from peak
• Tech will continue to dominate job growth
• Firms maintain a strong presence in San Francisco
• Traditional users may move some operations to lower-cost suburban markets, but will keep headquarters in San Francisco
• Construction pipeline ramping up across major markets; Much of this space is pre-leased– Office construction increasing in
Silicon Valley and going vertical
Key Trends in 2013
• San Francisco and Silicon Valley will remain a tech “hot spot” given high concentration of talent, firms and venture capital. – Act now – this could last another 36 months
• Outdated real estate will be replaced with newer, more efficient space. – Renovations will continue in San Francisco– New construction in Silicon Valley will replace old/tired space
• It’s what is inside that counts– Interior design– Flexibility in workplace strategies
Market Strategies & Opportunities
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