Despite the coronavirus pandemic and continued social distancing orders, it looks like tech companies in the region are keeping their office spaces.
CBRE Group, a real estate services and investment firm, released a report detailing office leasing for technology companies across the nation. The leasing activity data assessed in this report includes direct, sublease and renewal transactions.
In the second quarter of this year, the D.C. region ranked first with 1,445,528 square feet in tech office leasing. CBRE reports that the area’s tech office leasing nearly doubled the volume of San Francisco’s, and tech office leasing in the region grew by 55% compared to 2019’s quarterly average for Q2.
“The D.C. area continues to be an attractive market for technology companies,” said Vice Chairman at CBRE Meredith LaPier in a statement. “As the second-ranked tech talent market in the U.S, with a highly educated workforce, large concentration of millennials, and significant tech job creation, the D.C. area’s tech-office leasing sector is well poised to capitalize on the next growth cycle and thrive as the pandemic subsides.”
Northern Virginia accounts for 76% of the D.C. area’s total tech office leasing with 1.1 million square feet of space. NoVa led the overall market demand and has been doing so since the beginning of 2018, per the report. This could in part be due to Amazon’s second headquarters coming to NoVa and other tech companies like Blackboard and Amify relocating their offices to the area.
“The tech industry has proven resilient during the pandemic with many companies experiencing increasing demand for their products and services,” said Colin Yasukochi, executive director of CBRE’s Tech Insights Center. “Even so, many tech companies’ real-estate plans have been put on hold until more clarity emerges on business conditions and the economy. When tech companies return to the office market, they’ll likely find better leasing opportunities at lower costs.”
The tech industry is the most active in office leasing in the U.S. according to CBRE, accounting for 20.5% of the newly leased office spaces in Q2. Despite this, the industry’s overall office leasing was down by 46% compared to Q2 of 2019.
San Diego and Atlanta were the only other major markets that reported an increase in tech office leasing in Q2. The San Francisco area’s tech office leasing was down a whopping 74% compared to its 2019 average for Q2.
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