Trophy Offices Open Up Historic Rent Gap

CHICAGO—Every major market in North America has its trophy spaces, the premier office towers with the best views, the most amenities and the highest rental rates. But the gap in rental rates between trophy space and all the rest has reached historic proportions. The most expensive offices now garner 77% more than non-trophy space, according to JLL’s 2015 Digital Skyline. Average trophy rates in the first quarter of 2015 were $57.97 per square foot compared to $32.70 per square foot in non-trophy buildings. Just ten years ago, this gap was only 20.8%.

“What we saw early on in the recession was a flight to quality,” Julia Georgules, vice president, JLL Research, tells GlobeSt.com. Many corporations took advantage of the decline in rental rates to move into the most desirable spaces, putting a significant constraint on supply in these buildings. Trophy properties in the 43 markets that make up JLL’s US Skyline have a vacancy rate of 10% and the rate for non-trophy assets stands at 15.1%.