We expect capital values to see another drop in 2026. But led by strong rent growth in Miami, we think southern markets will start to recover before the end of next year. Occupier demand in these metros will be supported by higher rates of office utilization and faster office employment growth than western markets and the major metros. This will lead to further divergence in performance, with Miami seeing total returns of 9% p.a. over 2025-29 and Phoenix not too far behind. At the other end of the spectrum, returns in San Francisco, Boston, Seattle and San Diego will limp to just 3.5%-4% p.a. over the five-year forecast, implying the importance of market selection in this cycle.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services