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Cushman & Wakefield
AMERICAS EUROPE APAC GLOBAL APPENDIXSUPPLY & DEMAND
In the U.S., the bulk of the new construction is concentrated
in the country’s largest cities, for example San Jose/Silicon
Valley, Dallas, the Washington, DC Metro, San Francisco and
New York. In all of these cities, supply will outstrip demand and
vacancy will inch up, but not dramatically so. Some smaller
markets are also ramping up construction. Nashville has the
lowest vacancy rate in the U.S. at the moment and developers
seem to be keenly aware. Nashville will see new completions
nearly quadruple over the next 3 years relative to the prior 3
years. The construction pipeline is also heating up in Charlotte,
Raleigh/Durham, and Denver—all generally healthy absorption
markets, but new supply will likely outstrip demand, resulting in
higher vacancy. Outside of the U.S., Montreal and Mexico
City fall into a similar category—where completions look
relatively high to net absorption.
On the other end of the spectrum, developers in
some markets appear to be underestimating future
demand. This includes Orlando, Phoenix, Portland and
Philadelphia—in all of these markets, office-using job
growth remains solid, and in some, is shifting into a
higher gear. These markets stand out as some of the
strongest opportunities for future development.