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Where It's Cheapest to Build Out a New Office
"Washington DC has the most affordable office build out costs in the US," reports Erika Morphy. That conclusion is the finding of a the first "US Fit Out Guide," released recently by JLL (Jones Lang LaSalle).
The report calculates the national average cost to build out an office at $196.49 per square foot. " Then JLL takes into account the average landlord-provided [tenant improvement] allowance of $43.61 per square foot, making the out-of-pocket cost for tenants $152.88 per square foot." Relative to that average, Washington, D.C. office space costs $103.88 in out-of-pocket costs to build out. The most expensive office market, in the Silicon Valley of California, comes at an out-of-pocket cost of $199.22.
According to the report, Washington, D.C.'s favorable office market price are possible thanks to "record high concession packages from landlords that are desperate to get tenants into the growing amount of available space." Morphy noticed that tenant improvement (TI) allowances have been getting more and more lucrative for tenants in an article from 2015.