Midtown New York was ranked by real estate services firm CBRE as the world’s 18th most expensive place to get office space — a bargain compared to the city’s notoriously pricey residential market.
The CBRE survey, conducted twice a year, compares rental costs for prime office space in 133 cities worldwide. Central Hong Kong offices commanded the highest price in the world, at an average of $248 per square foot — more than double Midtown’s $114 per square foot. London’s West End, Tokyo, Beijing and Moscow rounded out the rest of the top five. Downtown Manhattan took the 41st slot, with $69 per square foot.
Other US locales that made the list included downtown Washington D.C. (#23), downtown Boston (#27), suburban Los Angeles (#32) and downtown San Francisco (#37). Although Midtown New York posted the highest commercial rents in the US with a 5.9 percent increase from last year, downtown San Francisco and the peninsula area near San Francisco had the largest domestic gains at 34 percent and 32.7 percent respectively, spurred by the technology sector.
On an international level, the most expensive offices are increasingly located in emerging economies, where commercial buyers are diversifying to take advantage of rising incomes and the availability of labor, said Raymond Torto, CBRE’s global chief economist. Of the top ten commercial markets, six were located in Asia. The Asia Pacific region witnessed a 7.8 percent increase in office occupancy costs in the first quarter of 2012 year-over-year, as opposed to a 5 percent increase in the Americas and 0.4 percent bump up in Europe, the Middle East and Africa.