Tech companies accounted for 21% of all leasing activity nationally last year, a statistic that not only shows growth in that market segment, but also a post-pandemic rebound.
According to a new report issued by the commercial real estate services company CBRE, tech company leasing had dropped to 17% during the year of the Covid 19 outbreak in 2020, accounting then for around 9.1 million leased square feet.
As of the end of last year, high tech transactions had increased to 13.8 million square feet, with individual deals of 100,000 square feet nearly doubling.
“These 100,000-plus square foot transactions tend to be market moving and involve tenants opening a new location,” notes the CBRE report, while acknowledging that lease renewals “typically rise during uncertain times and less often involve a change in the amount of space leased.”
The vibrant social media industry accounted for 42% of the new leasing activity last year, with e-commerce firms not far behind at 22%, and software companies making up 21%.
Regionally, northern California’s Silicon Valley, along with Austin, Boston, San Francisco, and Seattle, made up a significant 57% of the nation’s total large-block tech leasing volume. Atlanta, meanwhile, saw a record-breaking increase over 2020 of some 180%.
Curiously, while the initial months of the Covid 19 outbreak led to a decline in office use within the tech company sector, as it did in virtually all sectors, those same companies took on more employees due to increased business demands as 2020 unfolded.
Such growth, contends the CBRE report, “has led to pent-up demand, which is starting to be filled, despite hybrid work plans that will bring fewer people into the office each day.”
By Garry Boulard
