(Reuters) – Stepped-up business hiring pushed the rental price of U.S. office space up 3.1 percent in the first quarter, the highest quarterly gain in a decade, as demand for commercial real estate accelerated, according to Jones Lang LaSalle Inc.
Though occupancy growth in office space slowed to just over 6 million square feet from about double that pace throughout 2014, development activity and rental growth in particular sped up, JLL said in a report to be released on Wednesday.
The commercial real estate expansion is being driven by technology companies looking for the best office space in the central business districts of key U.S. cities.
New York City, in particular the midtown area south of 34th Street, has the lowest vacancy rate across the United States and one of the highest growth rates in rental prices, said JLL, a global commercial real estate firm.