Cybercrime’s Impact on CRE

In a new report, Cushman & Wakefield outlines the impact of cybersecurity on the commercial real estate industry and found that in 2017, the cybersecurity venture capital investment in the U.S. increased by $1 billion dollars to $5.6 billion.

Nationwide last year, cybersecurity companies signed more than 1.4 million square feet of real estate, or roughly 2% of total office space taken in the year. Of the areas that saw a dramatic increase, San Francisco tops the list with 800,000 square feet, closely followed by Washington, DC with 132,000 square feet.

For the most part, the main demand for the spaces is for network maintenance and administration, and the design and development of cybersecurity systems. Many cybersecurity companies are purposefully locating themselves close by their financial, defense and software clientele.

John Redeker, leader of Cushman & Wakefield’s Cybersecurity Advisory Group, said “Cybersecurity companies in these markets are prioritizing lease flexibility and scalability as they occupy more space to accommodate their growth …developing an effective real estate strategy has become vital to the success of new leases across different markets.”

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