California CRE News In Your Inbox.
Sign up for Connect emails to stay informed with CRE stories that are 150 words or less.
Cushman & Wakefield Report Highlights Tech’s Critical Impact on CRE
Existing and emerging tech centers are increasingly driving the North American economy, and that’s being felt across the commercial real estate sector. New research by Cushman & Wakefield found that in the first of half of last year, 42% of the square footage in the top 100 leases in North America were signed by tech companies.
The brokerage firm’s Tech Cities 2.0 report also noted the fastest-growing tech employment market since 2010 has been Provo, UT. Though a smaller market than the others on the list, the number of people employed by tech companies increased 64.9%, surpassing the 62.7% increase in San Francisco.
Cushman & Wakefield’s Ken McCarthy notes the profound impact the tech sector has had on commercial real estate hasn’t arrived in one fell swoop, but has been building since the financial crisis of 2008. “Although we expect established markets like Silicon Valley to see continued investment, new tech hubs are emerging across North America, from Provo to Philadelphia, sustaining a period of tech-driven, economic growth unseen since the dot-com boom of the late 1990s,” says McCarthy.
Average asking rents in cities like Atlanta, Austin, Seattle, and San Francisco have increased more than 50% since 2010. Meanwhile, the report revealed property prices are skyrocketing. Among the Top 25, property prices have increased on average by 59%, with the greatest increases happening in Austin, Silicon Valley, and San Francisco.
Cities that are targets for venture capital funding are the most important tech cities in North America, notes the Tech Cities 2.0 report. Among the Top 25, VC funding grew by an average of $2 billion compared to $457 million for the top 101 markets.
The top four cities for new construction are all cities where tech is a critical factor in the local real estate market, including: Austin, Raleigh/Durham, Seattle, and San Francisco.
Tech Cities 2.0 ranks cities in three major categories:
Tech is a critical component of the local economy and CRE market:
- Austin
- Boston
- Provo
- Raleigh/Durham
- Salt Lake City
- San Diego
- San Francisco
- Silicon Valley
- Seattle
- Washington, DC Metro
Tech is a key driver of the local economy and CRE market:
- Atlanta
- Dallas/Fort Worth
- Denver
- Minneapolis/St. Paul
- Montreal
- Portland, OR
- Toronto
- Vancouver
Tech is important to the local economy and CRE market, but there are other important sectors as well:
- Baltimore
- Charlotte
- Chicago
- Greater Los Angeles
- South Florida
- New York City
- Philadelphia
For comments, questions or concerns, please contact Dennis Kaiser
