Drew Dixon
The Fort-Myers-Cape Coral area saw the biggest jump in business rental rates in the country in the past year, while Florida in general is seeing hikes in the cost of renting space for entrepreneurs.
Outsource2India, a business outsourcing service, conducted the study on business and office space rental prices for the first quarter of 2024.
The Top 10 most expensive business rental space markets were dominated by metropolitan areas in California ,which accounted for four of those 10 areas. The San Jose-Sunnyvale-Santa Clara metro area, which is home to a plethora of technology firms, topped the list, with office rental spaces charging an average of $58 per square foot.
The study analyzed the office and business rental markets in major U.S. metropolitan areas using data sourced from the National Association of Realtors (NAR).
The Miami-Fort Lauderdale-Pompano Beach metro area was ranked fourth on the list. Florida’s largest market is now charging, on average, $50 per square foot for renting a business space.
The study compared this year’s business rental rates to 2023 rates and for the most part, there was little change in office rental rates among most areas in the U.S. Some 74% metropolitan areas saw little change in the rental rates for entrepreneurs.
But Florida bucked that trend. “Interestingly Florida seems to be a very dynamic market with 55% of its metropolitan areas increasing rent prices for offices,” the study concluded.
While not making the Top 10 for most expensive business rental rates, one Southwest Florida community saw some of the most dramatic increases in business rental rates. The Cape Coral-Fort Myers metro area witnessed an 8.3% jump in the price for business rental rates and price per square foot in the past year.
In fact, the Cape Coral-Fort Myers rent price increase for offices and businesses was the largest annual increase anywhere in the country.
Abilene, Texas, was second with a 6.67% jump in the past year.
The Miami-Fort Lauderdale-Pompano Beach metro area was the only Southeastern U.S. market in the Top 10 of the most expensive overall rates in the U.S. The Austin-Round Rock-Georgetown, Texas area was the only other Sun Belt metro area in the Top 10 list, coming in at fifth with an average price of $44 per square foot.
“These findings underscore the complex dynamics at play in the office space market. Florida seems to be doing better at growing the office rent market than other states. With very high prices, California is experiencing more of a struggle,” the study found.
When it comes to the most affordable office rental space, Florida metro areas were nowhere near the top of that list. Four markets were tied for the least expensive office rental rates, at $15 per square foot, including Canton-Massillon, Ohio, Erie, Pennsylvania, Wichita Falls, Texas, and Youngstown-Warren-Boardman, Ohio.
One comment
PeterH
August 12, 2024 at 4:08 pm
I guess it all depends on what types of businesses are renting in office buildings. West Coast cities that cater to IT and Silicon Valley ventures are allowing their employees to work remotely leaving a huge glut of empty downtown offices.
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