Construction activity continued its slowdown in the first six months of 2024, as interest rates and construction costs remain high. As always, we used CommercialEdge data to ascertain trends around office construction activity throughout the country’s major real estate markets, as well as highlight some of the largest office projects that have been delivered in the first half of the year (H1), as well as the top 20 office developments that are estimated to be completed in 2024. Consult our methodology section for a better understanding of how we collect and analyze construction numbers.
Across major U.S. markets, approximately 77 million square feet of office space is currently under construction with Boston contributing some 12 million square feet, followed by Dallas and San Francisco with similar amounts (5 million square feet).
But, while Boston also stands out for its percentage of office space under construction compared to its overall stock (5%), it’s Austin, Texas, and Miami that complete the podium this time. North Carolina’s Winston-Salem-Greensboro also makes a surprise showing following a 4% bump in new office construction within this market.
In terms of major office projects in the pipeline, the first half of 2024 has seen some important movements in the Seattle market with roughly 2.8 million square feet delivered, most of which is located in Bellevue, Wash. On the opposite side of the country, recently completed developments in Cambridge, Mass., and Sommerville, Mass., increased Boston’s office inventory by 1.3 million square feet.
That said, plenty of big projects remain in the pipeline for the remainder of 2024. To that end, two major developments in Manhattan, as well as Amazon’s new offices in Bellevue, Wash., and Sherwin Williams headquarters in Cleveland — all properties with more than 1 million square feet of space — have had their completion dates pushed back to the final months of the year.
Click on the highlights in the executive summary below to learn more development insights and details on the largest office projects scheduled for completion this year.
Executive Summary
- Boston life sciences boom continues to dominate nationwide construction numbers
- 7 of the top 10 markets for highest percentage increases in office inventories are from South
- Top 20 office completions H1 2024
- Top 20 office spaces under construction (estimated delivery 2024)
Boston Life Science Boom Continues to Dominate Nationwide Construction Numbers
The gap between office construction activity in Boston and the rest of the U.S. grew wider in the first half of 2024 as the New England market continues to attract disproportionately more investment from developers than any of the other locations that made the cut.
Unsurprisingly, life sciences spaces dominate the city’s pipeline with Boston also boasting three entries in the mid-year top 20 office projects under construction. At 707,000 square feet, One Boston Wharf is the largest among them. Upon completion, it’s expected to be the largest net-zero carbon office building in the city.
Next, runner-up Dallas presently has less than half of the amount of office square footage under construction as Boston (roughly 5 million). The largest of the ongoing projects is the TIAA Tower in Frisco, Texas, a 1.5-million-square-foot, mixed-use project owned by Blue Star Land and developed by Lincoln Property. The office portion of the development will encompass approximately 500,000 square feet.
However, the TIAA Tower is a bit of an outlier in terms of the current makeup of the Dallas market pipeline. That’s because the vast majority of office properties currently under construction are around the 50,000-square-foot mark with a flurry of smaller office projects underway across nearby Fort Worth and Lewisville.
At the start of 2024, San Francisco was actually poised to be Boston’s closest competitor with 7 million square feet in its pipeline. But, throughout the first six months of the year, the California market witnessed a host of deliveries for office projects in the 100,000- to 200,000-square-foot range — including the three-building Genesis Marina in Brisbane, Calif. As a result, the San Francisco office market currently has nearly 5 million square feet still under construction.
In fourth place, the Austin, Texas, office pipeline adds up to roughly 4.3 million square feet. Here, the market’s top developments currently in the pipeline are two creative office projects by the Jay Paul Company. Totaling some 833,000 square feet of office space across two buildings, Springdale Green will feature approximately 36,000 square feet of outdoor terrace space; a 23,700-square-foot fitness and wellness center; and more than 20 acres of restored ecological landscape.
Back on the West Coast, the San Diego (#5) market is looking forward to some 3.8 million square feet of new office space for the remainder of 2024 with four of the five largest office projects in the works labeled as life sciences facilities. More precisely, Stockdale Capital Partners and Breakthrough Properties are showing great confidence in the continued growth of life sciences spaces across the southern California market as they have several projects larger than 100,000 square feet underway, including the 1-million-square-foot, mixed-use Campus at Horton Plaza, as well as the fully-leased 10-acre Torrey View life sciences cluster in the Del Mar Heights submarket.
In seventh place, Manhattan, N.Y., has roughly 2.7 million square feet of office space under development, including two of the largest projects across U.S. markets — the 1.3-million-square-foot 7 Hudson Square and the 1.2-million-square-foot Terminal Warehouse Redevelopment.
Winston-Salem-Greensboro Among Southern U.S. Markets with Highest Office Stock Percentage Increases
Office stock percentage growth is headed by Boston with 5%, but Southern markets have a significant presence across the ranking. In fact, seven of the top 10 markets recording the highest percentage increases in their office inventories are from the South with Austin, Texas, and Miami leading the way with growth rates of 4.6% and 4%, respectively.
Additionally, Winston-Salem-Greensboro in North Carolina and Nashville, Tenn., witnessed a similar bump to their office stocks during the first half of 2024, while increases in West Palm Beach-Boca Raton in Florida, as well as North Carolina’s Charlotte and Raleigh-Durham have hovered around the 2% mark.
Back out west, San Diego and San Francisco boasted the fastest-growing office inventories across the Western region (4% and 3%, respectively), while the most significant boost for a Midwestern market was recorded in Cleveland-Akron at 1.5% with roughly 1 million square feet of space to be added soon to the city’s office inventory.
7 Projects Across Western Markets Among Top Office Completions in H1 2024
The first half of 2024 saw a number of high-profile office projects completed with the spotlight firmly placed on markets across the Western United States.
The #1 delivery in terms of sheer size was the 1.25-million-square-foot May Lee State Office Complex in Sacramento, Calif. Designed by ZGF Architects in collaboration with Dreyfus + Blackford, the 17.3-acre site houses four buildings that are the new home of the California Department of General Services’ 5,000-strong workforce.
That said, the most significant life sciences project delivered in the first quarter of 2024 was The Rise, a 745,000-square-foot project that’s part of IQHQ’s five-acre RaDD development along San Diego’s waterfront. It was completed at the same time as another life sciences building on the campus called The Vida.
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A string of projects across the Seattle office market were also topped off in the early months of the year. Chief among them was Vulcan Real Estate’s West Main — a 1-million-square-foot property in Bellevue, Wash., that will be fully occupied by Amazon. Of the remaining developments, only the 546,000-square-foot Washington One Thousand in Seattle has yet to secure tenants as both Schnitzer West’s The Artise and Skanska’s The Eight are either fully or largely occupied or in the process of filling their tenant roster.
Top Office Completions Deliver 1.8 Million Square Feet of Life Science Space to Northeastern Inventories
Keeping in line with the steady demand for life sciences workspaces in the Northeast, some of the largest office projects coming out of the pipeline in Boston; Bridgeport-New Haven, Conn.; and Philadelphia delivered roughly 1.8 million square feet of medical, life sciences, and research and development facilities across the region.
First, at 525,000 square feet, 101 College St. in New Haven, Conn., is the largest of the lot, currently housing the likes of Yale University; biotechnology company Arvinas; and Alexion, a subsidiary of pharmaceutical giantAstra Zeneca.
Notably, the Honickman Center in Philadelphia was the largest medical office project completed in the first half of 2024, delivering a 462,000-square-foot facility that features more than 300 exam rooms; 58 infusion chairs; 10 operation rooms; six endoscopy rooms; imaging and laboratory services; a pharmacy; and virtual surgical theaters.
Southern Markets Focus on Office Spaces Below 500,000 Square Feet
A host of office spaces below 500,000 square feet were completed in the South. For instance, in the second quarter, The Georgetown Company’s Campus 244 and the Georgia Institute of Technology’s Science Square Labs hit the Atlanta office and life sciences market.
Additionally, Swedish developer Skanska delivered another major office development in the first half of the year, this time in Houston, as it completed the 28-story Class A 1550 on the Green. The property — designed in collaboration with architecture firm BIG-Bjarke Ingels Groups (BIG) and featuring interiors by Michael Hsu — is the first phase of a three-block district that will also add several restaurants and entertainment venues in downtown Houston. It’s worth noting here that 1550 on the Green’s distinctive side-core appearance is due to the site’s small footprint and long frontage along the nearby Discovery Green park.
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Manhattan Duo Still Leads List of Largest Office Spaces in Pipeline
With their delivery dates pushed back to the second half of 2024, Disney’s 7 Hudson Square and L&L Holding’s Terminal Warehouse Redevelopment remain the largest office projects in the pipeline. Both New York City properties are more than 1.2 million square feet.
At the beginning of the year, the Seattle market had one of the most significant contributions within top-20 office projects set to be completed in 2024 with five entries totaling 2.1 million square feet, the majority of which are located in Bellevue, Wash. With most of these wrapped up in the intervening months, the only remaining entry still under construction is Amazon’s Bellevue 600 (at #3) with an estimated completion date in the third quarter.
Meanwhile, the Midwest’s largest project expected to be delivered remains the Sherwin HQ in Cleveland (at #4), as well as the Sherwin-Williams-owned Global Research and Development Center (at #10) in Brecksville, Ohio.
Just outside the first half of the ranking, we find another Midwestern office project under construction in the 562,000-square-foot Block at Hudson’s Site in Detroit. The property is the office component of a $1.4-billion, mixed-use project that will also contain a 210-room, ultra-luxury Edition Hotel, as well as about 97 condominiums and apartments.
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Largest Projects in Pipeline Set to Add 2.4 Million Square Feet of New Office Space to Bay Area
The Bay Area contributes four projects to the list of the top 20 office developments expected to be completed in 2024, including three located in Sunnyvale, Calif. The largest of these is Intuitive Surgical’s 847,000-square-foot R&D facility along Kifer Road. The property was designed by Foster + Partners and will also feature a second, 364,000-square-foot building and a spacious garage able to accommodate some 2,550 cars and 198 bicycles. Once the other phases of the project are finalized, the property will become Intuitive’s headquarters.
Next, and expected to be delivered in the third quarter, Google’s Caribbean Campus (also in Sunnyvale) will add two new assets totaling roughly 1 million square feet to the tech giant’s real estate portfolio. Located near the Borregas light rail station that provides links to the Mountain View Caltrain Station and Alum Rock in East San Jose, the campus is also a part of the city’s Moffett Park Specific Plan. The aim of this extensive development plan is to create approximately 20,000 new homes and nearly 10 million square feet of new office and research space.
Notably, the only major data center project currently under construction is the 486,000-square-foot CAE in Santa Clara, Calif. The four-story facility is owned by Vantage Data Centers and is expected to open its doors in the closing months of the year. It will be powered by Silicon Valley Power using 100% renewable energy.
Methodology
We based this article on data that we compiled from CommercialEdge. Deliveries data for the top 20 was extracted on July 19, 2024, while national construction data was based on numbers as of July 11, 2024.
We only included properties equal to or larger than 25,000 square feet and that were designated either exclusively or primarily for office use (such as mixed-use, including office space).
Data presented under the top office developments of 2024 includes under-construction projects with estimated completion dates during this calendar year. Final delivery dates may differ. The square footage shown for each entry represents total property size.
Owner-occupied projects were excluded from market totals, but not from the top 20 deliveries list.
Disclaimer
While every effort was made to ensure the timeliness and accuracy of the information presented herein, the information is provided “as is” and neither CommercialCafe nor CommercialEdge can guarantee that the information provided is complete. This report is for general informational purposes only. It does not constitute and should not be relied upon as a basis for any investment decision. The information presented is subject to change without notice and may or may not apply depending on the circumstances. Always contact a qualified investment consultant if you need advice regarding buying, selling or otherwise transacting in any investment.
