Financial districts across the country are struggling to fill empty offices. In some districts it takes well over a year to fill office space, according to a recent report from The Kaplan Group.
The study found that financial districts in San Francisco, Seattle and Houston face the highest risk of major office loan defaults among all U.S. districts, while districts in Philadelphia, New Orleans and Miami are experiencing fewer challenges filling space.
Financial districts are defined in the study as being in a central area where financial service firms such as banks, insurance companies and other financial corporate headquarters are located. They can include skyscrapers, stock exchanges, and regulatory offices.
The survey also revealed that the national median days an office remains on the market is 334 days but jumps to an average of 599 days in a financial district, a sign according to the study that these areas are losing their appeal for companies.
Hartford, Connecticut leads the United States at an average of 1,183 median days on the market followed by Des Moines, Iowa, Atlanta and Houston all over 800 days. Philadelphia (315), Miami (278) and Jacksonville, Florida (163) are below the 334 median.
Monthly rent cost per square foot is highest in San Francisco at $4 per square foot followed by New York at $3.83 and Boston at $3.50.
The study showed a connection between square footage and the number of available offices that indicates that larger offices are more difficult to rent, perhaps a sign that hybrid work settings and more companies embracing work-from-home concepts.
The Kaplan Group outlines what can be expected if the current trends continue.
Dave Lubach is executive editor for the facilities market.
