The divergence between the struggling western metros and the better-performing southern metros remains the key story in office markets. That expectation is underpinned by both higher office utilization rates in southern metros and by their better prospects for office job growth. While Houston has slipped down the rankings slightly this quarter, that is because of upgrades to the rent growth outlook in both Phoenix and Miami. In the latter, we are forecasting rent growth of nearly 3.5% p.a. over 2025-29. Meanwhile, we expect western, tech-focused markets to experience the slowest recovery, with San Francisco and Seattle the weakest markets for rent growth, at 0% p.a. over the five years. Those divergent rent outlooks drive significant variation in our returns projections, with Miami and Phoenix above 9% p.a. and San Francisco only just exceeding 2% p.a.
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