According to a new report by Transwestern on mass transit's influence on the U.S. office market, the national average rent in transit-accessible office buildings was 65 percent higher than the average market rent in early 2018.
The examination of 15 major metros shows average rent in Central Business Districts was $43.48 per square foot NNN for transit-accessible buildings versus $26.01 per square foot NNN for car-dependent buildings. Transit-accessible office space was also at a premium in the suburbs, with average rent of $33.43 per square foot NNN being nearly 50 percent higher than rent in car-dependent buildings.
"As workplace amenities have become increasingly important to companies in attracting and retaining talent, tenants are most certainly keeping accessibility to mass transit on their radar when surveying office product," said Brian Landes, Director of GIS/Location Intelligence for Transwestern. "Not surprisingly, vacancy for transit-accessible buildings is lower than overall vacancy, which makes these buildings extremely attractive to commercial real estate investors."
In the analysis, transit-accessible buildings are defined as those within a 10-minute walk from a subway, commuter rail or light rail facility. Based on the combined statistical areas (CSAs) in the set, approximately 39 percent of total office inventory is categorized as transit-accessible, while the remainder is car-dependent. Nationally, the CSAs of Denver, New York/New Jersey, Washington, D.C., and the San Francisco Bay Area are rated the highest on the transit-accessibility scale, with approximately half of the office market's inventory or greater qualifying as transit-accessible.
Landes said, "For a tenant, landlord or investor, accessibility to mass transit is only one of many factors that should be considered when making a real estate decision, and there are many markets and submarkets throughout the country that are performing well without a significant mass transit infrastructure. But the data demonstrates that this amenity can have implications for everything from a qualified labor force to long-term property values."