Foreign capital investment in the most sought-after trophy buildings in the U.S. grew to $5.2 billion in 2013, up from $1.9 billion the year before, according to the soon-to-be-released Jones Lang LaSalle's Spring 2014 U.S. Skyline Review covering 979 urban, high-quality office buildings in 43 big cities in the U.S.
Foreign capital accounted for 50.2% of the buyers of trophy offices in 2013 in primary markets, including New York, Washington and Boston. Much of the capital flowing from outside the U.S. is coming from China and Norway, which accounted for $1 billion in transactions last year.
This year, the majority of city centers covered by the report are landlord-friendly, meaning landlords have the upper hand in negotiating leases including rental rates. In 2014, JLL expects increased rent growth in the secondary cities, including Atlanta, Austin, Baltimore, Charlotte, Cleveland and Columbus, in part due to limited new supply of trophy office buildings.
Construction of new trophy offices in the cities covered by the report rose to 34 buildings totaling nearly 17 million square feet in 2013 from 20 buildings with about 12 million square feet the year before. However, most of the construction has been concentrated in San Francisco, New York and Houston.
