Seattle Records 15% Office Rental Growth, The Highest In North America
USA – Real estate consultancy CBRE named Seattle as the top commercial property market in North America for tech firms in terms of office rental growth, reported Geek Wire on Saturday (6 November, SGT).
This is after office rents in the area rose by 15 percent between Q2 2019 and Q2 2021, beating the rental growth of other tech hubs in the continent, according to CBRE’s new Tech-30 report. Completing the top 5 are Vancouver (13.3 percent), Charlotte (11.2 percent), Austin (10.8 percent) and Montreal with 9.6 percent.
The strong office rental growth came despite the prevalence of working from home (WFH) amidst the COVID-19 pandemic and the health crisis’ impact on office space demand.
Hybrid work did not mean permanently vacant buildings, explained CBRE’s Senior Vice President in Seattle, Brian Biege.
“Many tech companies in Puget Sound (which includes Seattle) have grown their business during the pandemic,” he noted. “While most are embracing a hybrid work format, they are also investing in office space as part of their plans for future growth.”
Based on data from CBRE, the tech sector supported the recovery in US office rental activity this year. Hiring by tech firms in the country surpassed pre-COVID levels by 3.3 percent, and while many of these new hires didn’t immediately go into an office, many firms planned as if they would.
As a matter of fact, office rental activity by tech firms across the country surged by 122 percent on average in Q2 and Q3 2021 compared to the first 3 months of the year.
“Their demand for modern, collaborative office space is rooted in fostering innovation; it is pushing rents to historically high levels,” Biege added.
However, data from CBRE shows that office space listed for sublease by tech firms in the Tech-30 markets almost doubled from Q1 2020 to Q3 2021, and it now totals about 134 million sq ft. While tech firms make up 23 percent of all office space listed for sublease, up from 14 percent in 2019, overall sublease space in the United States likely peaked during the previous quarter.