Tenants paying record high rents for Trophy office space

High water mark base rent and date executed by market
(Deals >20,000 s.f.; 5Y minimum term)

Contributors:

Despite softness in overall demand, appetite for high-quality space is propelling top-of-market rents in many geographies: nearly one-half of major markets have seen leases executed at record high base rent in 2022, and more than 80% have set new record rents since the pandemic began.
Outlier demand for best-of-best suites has driven true top-of-market rents even higher on select smaller-scale transactions: Manhattan has seen executed rents close to $300 p.s.f. for smaller transactions in prime product, and across both gateway markets and supply-constrained growth markets like South Florida, rents above $100 p.s.f. have been achieved with regularity.
The divergence of high-end rent and overall rents, which continue to decline, provides evidence that a large share of office demand has shifted focus to the relatively scarce supply of Trophy and differentiated Class A office product.

Public-private office pricing disconnect is intensifying