As the U.S. economy adds jobs, office landlords are adding tenants — but the landscape for how and where we work has changed fundamentally in the last decade. Technology makes offices less necessary for some workers, leading to shared office spaces in some companies to maximize wasted desks. Younger workers are also demanding more creative, healthy office environments with every added convenience.
Investors in the office market have always focused on location, but now location shares importance with industry and competition, according to JLL, a professional services and investment management firm specializing in real estate. JLL ranked the top 10 most expensive streets, which win in all three of these categories.
Tech, life sciences and education "steer the ship," according to the report. That is why three of the top five spots are in northern California.
"Walk down Hamilton Avenue and you'll see it's lined with tech companies and venture capital/private equity firms — it really is at the center of the Silicon Valley world," said Hugh Scott, managing director with JLL's Tenant Representation.
Competition is all about amenities. Millennials are automobile-averse and crave walkability. Therefore, tenants demand restaurants, retail, entertainment and residential areas all within walking distance to the office. They want environmentally healthy buildings with the most modern technologies available, and they're willing to pay top dollar for it.
Take a look at where location, industry and competition are adding up to mega-price-tags for office space.
—By CNBC's Diana Olick and Stephanie Dhue
Posted 2015 November 17