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Why are creative companies returning to the skyline?

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Creative companies are changing the market for U.S. office space. In recent years, many creative firms in the technology, advertising, media, and information sectors left the office buildings that make up the Skylines of North America. They wanted nontraditional, eclectic spaces in cities and areas that may have been off the beaten path. But times are changing. High demand, expensive rents and low availability of unique space have now created a boomerang back to more traditional Skyline properties. These Skyline spaces are, in many cases, more efficient and newly built or renovated, and building owners and developers are using fresh design features and perks to lure creative companies back.

Visit https://skyline.jll.com/ to learn more about this trend.

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Why are creative companies returning to the skyline?

  1. 1. 2017 Why are creative companies returning to the skyline?
  2. 2. Creative tenants return to the skyline Ten years ago, creative companies – those in the technology, advertising, media and information sectors – left their traditional office buildings behind in search of more unique, flexible space. They vacated central business districts across the country and flocked to suburban campuses, fringe markets and city outskirts instead. “We saw a meaningful shift in what creative companies desired in their work spaces,” explained Scott Homa, Director of U.S. Office Research at JLL. “Their migration outside traditional office buildings in central business districts had a significant impact on office leases in Skylines across the U.S.”© 2017 Jones Lang LaSalle IP, Inc. All rights reserved.
  3. 3. No Vacancy It didn’t take long for the trend to hit markets across the country. As more tenants flocked to unique buildings, office space become hard to find and harder to afford. As a result, many of those creative firms packed their bags and headed back to where they started: the Skyline. For instance, in Oakland's Uptown submarket, rents skyrocketed by more than 41 percent in the last 12 months to an average of $51.41 per square foot. Oakland’s average asking is rent in the Skyline is $54 per square foot. © 2017 Jones Lang LaSalle IP, Inc. All rights reserved.
  4. 4. © 2017 Jones Lang LaSalle IP, Inc. All rights reserved. Competing for tenant attention “Traditional office buildings are catering to today’s tenants with appealing amenities, modern design and energy efficient spaces,” said Homa. “Owners are investing in new perks to entice these companies to come back.”
  5. 5. © 2017 Jones Lang LaSalle IP, Inc. All rights reserved. New perks welcome old tenants To attract creative tenants into their buildings, landlords have gotten creative. Think perks like dog- friendly buildings, game rooms, top-of-the-line fitness centers and – for the environmentally conscious – electric car charging stations.
  6. 6. © 2017 Jones Lang LaSalle IP, Inc. All rights reserved. Promoting work-life balance is key Other perks that are top of mind for creative firms? Anything that helps promote work-life balance, like the ability to have your car washed while you’re at work or book a personal training session in the building.
  7. 7. © 2017 Jones Lang LaSalle IP, Inc. All rights reserved. Tech giants lead the way Over the past year, tech giants like Spotify, Expedia, Salesforce and Twitch accounted for 1.4 million square feet in Skyline lease signings larger than 100,000 square feet.
  8. 8. © 2017 Jones Lang LaSalle IP, Inc. All rights reserved. skyline.jll.com

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