On a recent trip to New York, I had the opportunity to have a conversation with Deidre Bolton of Bloomberg Television about Colliers’ outlook
on commercial real estate.
One of the major trends we touched on is the unevenness of
the office market recovery. Colliers Research has observed for over a year that
the strongest performers (in terms of job creation and office vacancy rates)
have been what we call “ICEE” markets: those with an employment profile that
strongly favors intellectual capital, energy and education,
rather than markets traditionally associated with “FIRE” (financial, insurance
and real estate) employment.
Recently, we've started to see the traditional FIRE markets
catching up: FIRE absorption climbed to 73% of the ICEE total, up from 44% in
1H 2013; this counter-trend is supported in the October employment numbers.
But a closer look reveals an interesting fact: Most of
the absorption in FIRE markets comes from submarkets with an ICEE profile.
Submarkets such as West Los Angeles, New York – Midtown South, Chandler, AZ,
and even Downtown Las Vegas are notable clusters of technology employment.
Several Atlanta submarkets, allied with top universities and research
institutions, are part of Atlanta’s transition from FIRE to ICEE.
The newly released North American Office Highlights report will takes a deeper dive into this topic, and includes a
list of key submarkets to watch that are outperforming (or are poised to
outperform) the metro areas in which they’re located.
