Where Are the Most Expensive Office Markets in the U.S.?

New York City aerial view

New York City ranked as the most expensive place to rent an office in the U.S. for this year, based on a Building Owners and Managers Association (BOMA) International report. The 2018 Office Experience Exchange Report listed the top five cities with steep prices per square foot, with the Big Apple coming out on top at $12.95 per square foot. If you are looking for a cost-efficient way to rent space, virtual office space in NYC could be a solution, particularly for start-up companies.

Expensive Places for Rent

The report based its rankings on the overall expenses for office buildings, such as maintenance and repairs, cleaning administration, and security. While NYC is at the top of the list, two cities in California joined the top five. It costs $11.65 per square foot to rent an office in San Francisco, which is the second-highest in the country, while the rate in Oakland costs $9.87 per square foot.

On the other hand, Salt Lake City in Utah is the cheapest place for rental offices, with a price of just $6.08 per square foot. Nashville, Tennessee, ranked next with $6.14 per square foot, followed by $6.15 per square foot in Orlando, Florida. Phoenix in Arizona and Cincinnati in Ohio completed the top five most affordable cities, with $6.25 per square foot and $6.34 per square foot respectively. You can save more on rental space by looking for flexible offices in any of these cities, where prices are much lower compared to other global cities.

Global Comparison of Rents

Hong Kong business district

New York City might be the least affordable place in the U.S., but it is still a cheaper alternative for companies than other cities abroad. CBRE’s report listed Hong Kong office rent as the most expensive in the world in 2018. The Central district, in particular, has an average cost of $306 per square foot. The price is 30% higher than in London’s West End, where the average rate is $235 per square foot for this year, according to the report.

This means that U.S. cities are still a better choice for multinational firms that want to expand their offices abroad. Part of the reason why Hong Kong is expensive has to do with the limited number of properties in the city, while demand remains strong. CBRE’s Tom Gaffney expects the situation to persist in the next few years, so it is safe to assume that Hong Kong will continue to be the priciest market worldwide. Much of the demand comes from the banking and finance industries, as well as co-working spaces.

In the end, flexible offices serve as one of your best options for affordable commercial space for rent in New York City or elsewhere in the country. Whether you are a multinational firm or a local start-up company, the concept of a co-working space is no longer just based on saving money. Instead, some businesses prefer this type of work environment to foster collaboration and modernize their corporate brand. However, be sure to weigh the pros and cons before making a final decision.

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