Newswire Mann Report

JLL: Sand Hill Road, Hudson Yards Top List of Most Expensive Office Streets in U.S.

The most expensive street for office space in the United States is not in New York City, Chicago or Miami — it’s Sand Hill Road in Menlo Park, California, with average full-service gross asking rents reaching $167.74 per square foot, said JLL’s “Most Expensive Streets 2024” report. The street is home to many venture capital and private equity firms, especially those focused on the tech sector.

New York’s 34th  Street in Hudson Yards isn’t far behind, asking $162.43 per square foot, and Royal Palm Way in West Palm Beach, Florida, running at $134.31 per square foot. Rounding out the top five are University Avenue in Palo Alto, California, at $109.04 per square foot, and Greenwich Avenue in Greenwich, Connecticut, at $105.00 per square foot.

The study, which analyzes more than 50 U.S. market, explores how U.S. prime office corridors have shown resilience amid a confluence of market headwinds, urban migration and supply constraints. At the same time, off-core, peripheral urban neighborhoods with robust dining and entertainment amenities have increasingly attracted high-end tenants looking for a vibrant atmosphere.

Prime office corridors have been relatively immune to recent challenges in the commercial real estate market; JLL research shows that vacancy remains highly concentrated in inferior assets with 10% of buildings comprising 60% of national vacancy. They also saw positive absorption in 2023, while U.S. office market overall registered more than 50 million square foot of negative net absorption.

“U.S. office assets in prime corridors have shown resiliency over the past four years as companies recognize the value in high-quality offices, not just as a means to motivate return-to-office strategies, but also as a recruitment and retention tool,” said Jeff Eckert, president, Americas agency leasing at JLL. “The best buildings in the best locations will continue to shine.”

Interest in mixed-used environments, in particular, has flourished as cities continue their post-pandemic transformation and consumer habits evolve. Activity levels in those areas with a more diverse distribution of property types among commercial, residential and entertainment uses have recovered more quickly than commercially dominated cores.

“It’s not surprising to see emerging submarkets become more dominant,: said Jacob Rowden, research manager, U.S. office at JLL. “These neighborhoods outside the CBD tend to be in the middle of the action and offer tenants everything they’re looking for — from dining and shopping to entertainment amenities and fitness centers.”