Tech Cities 2.0, shows how startups and technology firms took over the office market If it seems like every other office is occupied by a tech company, or that every other block downtown seems to have a new tech incubator, it?s not a coincidence.
A new report released today by Cushman & Wakefield, Tech Cities 2.0, shows how the tech industry dominates the commercial real estate market. Since the beginning of 2017, tech companies have accounted for 42 percent of the square footage in the top 100 leases in North America, according to the report. That?s double the percentage taken by the financial industry.
More importantly, the analysis suggests that tech has been a key driver in the rise in office rents. In the top 25 tech cities, as defined by the report, the cost-per-square foot for office space has risen 59 percent between 2000 and 2018, from an average of $199 per square foot to $316. That?s much slower than the country at large, which only rose 26 percent during the same period, from $197 to $248. In addition, 15 of the top 20 markets for new construction are tech markets, suggesting some relationship between industry demand and new office space. It?s not unexpected, considering tech?s dominance of the overall economy. Both Amazon and Apple?s valuations recently surpassed the trillion dollar mark, the tech-heavy NASDAQ just topped 8,000 for the first time last month, and seven of the globe?s 10 largest companies are tech firms. Tech employment has also outp...