Office Demand Holding Steady in Tech Markets
Requirements by Big Tech Companies Help Keep Office Markets in Balance, Rent Relief May Be on the Way With Several Large Projects Coming On Line Over Next Two Years in Bay Area, Seattle
September 15, 2016 | By Randyl Drummer | CoStar
Kilroy Realty Corp. is positioned to meet an ongoing tide of tech and life science demand with such projects as The Exchange on 16th, a $500 million project in Mission Bay totaling well over 2 million square feet.
Remember when reports that Twitter was subleasing a block of its office space in San Francisco caused a mini-panic among investors worried that the technology sector’s seven-year growth run may be coming to an end?
It turns out reports of the tech sector’s impending demise may have been greatly exaggerated, according to a new report by Jones Lang LaSalle and comments at a recent investor conference by CEOs of some of the largest US office landlords.
JLL reported that 63.4% of tech companies leasing spaces 20,000 square feet or larger have remained in growth mode over the past four quarters, compared to the overall U.S. rate of 48.9%. Only 4.6% of tech companies are shrinking their real estate footprint, compared with the national rate of 6.5%, according to a U.S. technology sector outlook issued by JLL.