Snapshots
Net effective rents continue to grow in most major CBDs, up 5% since 2019
November 13, 2024
Contributors:
- Jacob Rowden
- With leasing activity accelerating in the past six months, net effective rents continue to grow in the majority of major CBD markets and are up over 5% compared to 2019 levels across major markets collectively.
- Over the past five years, Sun Belt cities have dominated the fastest-growing office markets, with nine out of the ten largest increases in net effective rents occurring in Sun Belt cities, and both the fastest-growing markets in the state of Florida.
- Despite frequent downsizing since the onset of the pandemic, most markets have continued to see rental rates grow over the past five years: more than 80% of markets tracked by JLL have posted record rental rates in the wake of the pandemic, and Miami established a new record office rent earlier in 2024.
- Rents continue to see upward pressure as a large share of tenants seek to upgrade to high-end amenitized properties where availability is thinning.
- While discounted sales transactions have allowed new landlords to cut rents in previous cycles, new owners are largely opting to remove obsolete inventory from the market via redevelopment or conversion, and deploying capital to upgrade buildings that are well-located, which is limiting their ability to offer discounted rates.
