The real story behind high-watermark office rents across the U.S.

graph of select high-watermark office lease rent prices since 2023 in major office markets across the U.S. with Manhattan having the highest base rent per square foot with a relatively low tenant improvement allowance, compared with a lease in San Francisco's Financial District with a TIA nearly three times the cost of its base rent
  • High-watermark rents remain concentrated in the most sought-after U.S. office markets, but the spread is striking. Manhattan leads at $375 per square foot (psf), followed by Miami at $190, San Francisco at $175, and Boston at $166, demonstrating that occupiers are still willing to pay a premium for top-tier space even as broader office fundamentals fluctuate across markets.
  • The amount landlords are investing to achieve those rents varies just as dramatically. San Francisco pairs a $175 psf rent with roughly $500 psf in tenant improvement allowance (TIA) and Boston a $166 rent with $310 TIA. By comparison, Manhattan’s pairs a $325 rent with $160 TIA and Miami a $190 rent and $125 TI, highlighting how headline rent alone can mask differences in underlying deal economics.
  • For occupiers and investors, the full economic package matters more than the headline number. Large TIAs can help preserve premium face rents while shifting more capital to landlords. That creates build-out leverage for tenants but also requires investors to weigh record rents against leasing costs, effective rent, and the capital needed to secure occupancy.
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    Tucker White

    U.S. Office and Life Sciences Lead, Market Intelligence

    Boston

    Research, Market Intelligence

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