WASHINGTON, DC–Washington DC has the most affordable office build out costs in the US, according to JLL's first US Fit Out Guide.
JLL calculates that the national average cost to build out an office is $196.49 per square foot. Then JLL takes into account the average landlord-provided TI allowance of $43.61 per square foot, making the out-of-pocket cost for tenants $152.88 per square foot.
The most expensive market to build out an office is Silicon Valley, California, with an out-of-pocket cost of $199.22. And Washington, DC clocks in as the most affordable at $103.88.
The reason for DC being in the No.1 spot, according to JLL:
As the federal government, contractors and law firms continue to consolidate, slightly below average build out costs are offset by record high concession packages from landlords that are desperate to get tenants into the growing amount of available space.
Local TIs, in other words, are still among the highest in the US, a now two-year-old trend.
Greg McCavera, managing director in JLL's DC office breaks down the local figures.
Washington DC's build out costs are $189 per square foot, averaging about $150 per square foot on the lower end and at the higher end, north of $215 per square foot, he tells GlobeSt.com.
“Where we become the least expensive city is due to the TI allowances, which for most class A office buildings are $100 to $125 per square foot,” he says.
“We have the smallest delta between TIs and build out costs.”
McCavera doesn't think this trend will change anytime soon — meaning the high TIs are here to stay for the foreseeable future. On the other hand, incentives do appear to have leveled off so he doesn't believe that the TIs will go higher.
MARKETS WITH THE LEAST EXPENSIVE BUILD OUT COSTS
MARKETS WITH THE MOST EXPENSIVE BUILD OUT COSTS
WASHINGTON, DC–Washington DC has the most affordable office build out costs in the US, according to JLL's first US Fit Out Guide.
JLL calculates that the national average cost to build out an office is $196.49 per square foot. Then JLL takes into account the average landlord-provided TI allowance of $43.61 per square foot, making the out-of-pocket cost for tenants $152.88 per square foot.
The most expensive market to build out an office is Silicon Valley, California, with an out-of-pocket cost of $199.22. And Washington, DC clocks in as the most affordable at $103.88.
The reason for DC being in the No.1 spot, according to JLL:
As the federal government, contractors and law firms continue to consolidate, slightly below average build out costs are offset by record high concession packages from landlords that are desperate to get tenants into the growing amount of available space.
Local TIs, in other words, are still among the highest in the US, a now two-year-old trend.
Greg McCavera, managing director in JLL's DC office breaks down the local figures.
Washington DC's build out costs are $189 per square foot, averaging about $150 per square foot on the lower end and at the higher end, north of $215 per square foot, he tells GlobeSt.com.
“Where we become the least expensive city is due to the TI allowances, which for most class A office buildings are $100 to $125 per square foot,” he says.
“We have the smallest delta between TIs and build out costs.”
McCavera doesn't think this trend will change anytime soon — meaning the high TIs are here to stay for the foreseeable future. On the other hand, incentives do appear to have leveled off so he doesn't believe that the TIs will go higher.
MARKETS WITH THE LEAST EXPENSIVE BUILD OUT COSTS
MARKETS WITH THE MOST EXPENSIVE BUILD OUT COSTS
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
