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Tech Companies Dominate New Office Leases in the USA

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With more people moving to a hybrid schedule of sometimes working remotely and sometimes going to the office, the need for office space has largely been on the decline. Now, though, employers are starting to push their workers to spend more time in the office and start returning to a pattern of work that more closely resembles what we saw before the pandemic.

That means companies are starting to look for more office spaces, and no sector is moving faster in that regard than the tech sphere. Social media, e-commerce, and software companies in particular are leading the charge.

A micro view: Seattle’s office real estate

In Seattle, that point is especially noticeable. With two million square feet leased by tech firms, the tech sector has triple the amount of total office space than any other in Seattle.

This means technology companies account for 34% of the city’s office space when you take into account new leases, renewals, and expansions.

The trend holds true for both large and small deals. Of 22 leases in Seattle that were for offices over 50,000 square feet, 12 were signed by tech companies. Because the city has seen five leases that total 1.5 million square feet, it was ranked sixth in the nation for largest office leases in 2021.

The continued popularity of tech in California

Tech companies outside of Seattle are booming as well. Just behind Seattle’s sixth place ranking, the greater Los Angeles area had the 8th highest growth rate in tech jobs and tech companies renting out offices. Elsewhere in California, the growth is even more noticeable.

When most people hear “tech” they immediately think of Silicon Valley. At the end of 2021, tech firms were responsible for 21% of the 156.9 million square feet leased out to businesses nationally. That’s thanks in large part to Meta, the company that owns Facebook and Instagram, which accounted for over 700,000 square feet in Sunnyvale, the region’s largest deal of the year in 2021. Facebook added to its location in the San Francisco Peninsula and is adding 730,000 square feet to its midtown Manhattan location as well.

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There are other big companies making big waves in NYC, too. Amazon is adding 900,000 square feet of office space in New York City. Leases in Manhattan claim 20 of the top 100 spots for the biggest deals in 2020, totaling 6 million square feet, followed by Washington D.C. with 4.9 million.

Across the United States, technology firms made up 36 of the top 100 leases for office space in 2021, totaling 11.4 million square feet in leases. The next-closest contender was government and public administration buildings, which made up 5.1 million square feet.

If we look back to the start of the pandemic, tech companies leased a total of 15.3 million square feet of office space. Satellite markets like Atlanta, Austin, Denver, Nashville, Portland, and Raleigh are also seeing noticeable growth in office leases by tech companies.

Did tech bounce back from the effects of Covid-19?

Just like with most other businesses in the pandemic, when the coronavirus first hit, tech employment numbers dipped a bit. However, they weren’t affected nearly as much as other business sectors and have recovered much more quickly.

Since the technology sector has been growing so rapidly, even with a combination of remote work, many tech companies are still looking for offices.

Coworking spaces are growing in popularity as employers try to find new ways to attract workers, and the tech industry has been no exception to this movement. There’s also evidence to suggest startups grow faster in coworking spaces, and there are 1.35 million tech startups created each year globally.  

As technology continues to dominate new industry and therefore new job creation, it will also lead the way for new office space. The business has been on the up-and-up for about a year, and its upward trajectory is only becoming increasingly steep and increasingly swift. We can likely expect tech companies to continue making up a big chunk of new leases for the foreseeable future. 


About Author

Marie Edinger is a multimedia journalist and news anchor. She’s originally from Gainesville, Florida, where she went to the University of Florida’s College of Journalism to study Communications and Spanish Linguistics. She loves hiking, trying new recipes, and all things relating to The Lord of the Rings.

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