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Office Rent Growth Rising in “Tech-30” Markets
Technology companies based in the top four tech headquarters markets, Boston, New York, the San Francisco Bay Area and Seattle, are expanding into new markets, creating more demand for office space and driving office rent growth in the beneficiary markets, according to CBRE’s annual Tech-30 report.
Together, tech firms HQ’d in those four markets have taken more than 25 million square feet of space outside of their respective headquarters markets over the past five years. The list is led by firms in the San Francisco Bay Area, which accounted for 18 of the 25 million square feet.
Nine of the top 10 beneficiary markets experienced rent growth that exceeded the U.S. average of 5.6% over the past two years. Eight ranked in the top half of the Tech-30 markets in terms of rent growth.
The top four tech headquarters markets are also feeding each other, with cross-market expansion between the San Francisco Bay Area, Seattle, Boston and New York accounting for approximately 14 million of the 25 million square feet of migration.
CBRE’s Colin Yasukochi says, “We expect large tech companies to continue to expand outside their headquarters markets—including further into secondary and even tertiary markets—particularly as space availability in top tech submarkets continues to tighten, driving rents up. Large tech company expansion into smaller markets will help foster innovation clusters, further boosting job creation and creating additional office demand.”
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