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Office Sector Report: After a six-year slide, the office market is back in business

Jim Haughey, Director, Research and Analytics, Reed Construction Data

The office market began to grow rapidly late last year after declining since 2000. The turnabout was driven by the strengthening economy, which reduced office vacancy rates and pushed rent increases up to a 6% per year pace.

The office-based finance, insurance, real estate, professional, and technical services industries are adding employees twice as fast as the rest of the economy. This is a typical occurrence at the mature end of a business expansion.

Jobsite construction spending is expected to increase 20% in 2007 and 12% in 2008. The year-to-date value of office starts through May is 45% above the same five months last year, according to Reed Construction Data.

The value of office starts will increase 20% for all of 2007 and then expand enough to keep up with rising project costs for several more years.

Top 20 office design firms
(2006 billings in $ millions)


Firm Billings
Source: 2007 Giants 300 survey
Note: This ranking is based on firms that made the Giants 300 list.
1. Carter & Burgess 54.59
2. HOK 49.52
3. Gensler 42.10
4. Thornton Tomasetti 39.84
5. Perkins+Will 38.25
6. SmithGroup 35.59
7. Kohn Pedersen Fox Associates 34.32
8. Syska Hennessy Group 29.24
9. Parsons Brinckerhoff 25.06
10. NBBJ 22.46
11. Stantec 21.32
12. Smallwood, Reynolds, Stewart, Stewart 19.68
13. HDR Architecture 17.31
14. Burt Hill 16.47
15. HKS 16.17
16. KlingStubbins 15.60
17. Environmental Systems Design 14.95
18. RTKL Associates 14.46
19. Corgan Associates 12.30
20. Schirmer Engineering Corp. 12.26

Top 20 office contractors
(2006 revenue in $ millions)


Firm Revenue
Source: 2007 Giants 300 survey
Note: This ranking is based on firms that made the Giants 300 list.
1. The Turner Corp. 2,233.98
2. Structure Tone 1,431.00
3. Clark Group 649.80
4. JE Dunn Construction Group 461.16
5. The Opus Group 459.00
6. Duke Construction 382.00
7. James G. Davis Construction 350.86
8. The Whiting-Turner Contracting Co. 319.90
9. Gilbane Building Co. 282.49
10. Hoffman Construction 279.99
11. McGough Construction 275.94
12. Bovis Lend Lease 231.95
13. Austin Commercial 231.44
14. Swinerton Inc. 222.43
15. Skanska USA Building 190.00
16. M. A. Mortenson Co. 168.76
17. Balfour Beatty Construction 168.70
18. The Weitz Co. 163.90
19. DPR Construction 157.81
20. PCL Construction Enterprises 154.86

         

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