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West
Million
78
WY
WA
UT
OR
NM
NV
MT
ID
HI
CO
CA
AZ
AK
South
125
WV
VA
TN
SC
OK
NC
MS
MD
LA
KY
GA
FL
DE
AR
AL
TX
Midwest
68
WI
SD
OH
ND
NE
MN
MI
IN
IA
IL
MO
KS
Northeast
56
RI
VT
PA
NY
NJ
NH
ME
MA
CT
New York
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Boston
Washington DC Metro/VA
Salt Lake City
Chicago
Los Angeles
Austin
Seattle
San Francisco
Silicon Valley
Denver
San Diego
Atlanta
Toronto
Vancouver
BOSTON
CHICAGO
DENVER
LOS ANGELES
NEW YORK CITY
SALT LAKE CITY
SAN DIEGO
SAN FRANCISCO
SEATTLE
SILICON VALLEY
TORONTO
VANCOUVER
WASHINGTON DC METRO/VA
EXPLORE
Tech
IN THE 16 HOTTEST CITIES
Our interactive map highlights sixteen North American markets that are influenced by leading technology companies and their employees. This in-depth look provides insights and perspectives into what metrics are driving a shift towards more creative and robust local landscapes.
Newmark Research
Matt Davidson
San Mateo
Powered By The Technology & INNOVATION Practice Group
Highlights
matt.davidson@ngkf.com
Managing Director
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Visit Previous Tech Highlights:
Q1
2020
2021
Q3
New York City
Average Asking Rent % Change from 4Q20
Overall Availability Rate 4Q21
Total Available Sublease Space (SF)
2020 Office Leasing Absorption
Notable Tech Leases
Facebook
500K SF
TikTok
100K SF
Oracle
200K SF
Notable Active Requirements
Top Tech Submarkets
Far West Side
Chelsea
Hudson Square/Meatpacking
Madison/Union Square
Midtown South (East Side)
Long Island City
Top Life Science Submarkets
5 Local Market Macro Tech Points
Roku
240K SF
Clear
120K SF
Bloomberg
191K SF
Total MFAANG Office Occupancy
15.3 MSF
Total Coworking Occupancy
12.8 MSF
40%
11%
19%
30%
Tech Employment
Tech Employment 1-Year Change
+2.1%
Average Tech Wages
$201,058
Average Tech Wage 1-Year Change
+14.9%
..................................
$76.86
4Q21 Average Asking Rent
0.9%
18.5%
18.6
-20.8
MSF
15.5%
Overall Availability Rate 4Q20
(12.4% in July)
N/A
Net Effective Rent % Change from 4Q20
Back to MAIN PAGE
Sources: Newmark Research, Chumura/JobsEQ, PWC MoneyTree, HR Tech Group
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Discussion of Forward-Looking Statements about Newmark
-23.4
2021 Office Leasing Absorption (Year to Date)
163,448
1
Flight to quality with emphasis on amenities, outdoor space and new or re-developed assets and commute worthy locations.
2
Change in how the office is utilized with emphasis on collaboration space, break-out rooms, Zoom rooms, etc. to embrace idea generation, interactions, collaboration and develop culture.
3
4
Need to embrace a more flexible workforce as well as flexibility with real estate commitments and obligations.
Continued hesitancy from mid-sized tenants with greater conviction from small principal driven occupiers are large users planning for future.
5
Microsoft
Verizon
140K SF
DailyPay
137K SF
150K SF
Double Verify
80K SF
DataDog
350K SF
$15.1B
Q4 VC Funding
$53.6B
2021 VC Funding
Seaport
Downtown
Back Bay
East Cambridge
Cambridge
3 Local Market Macro Tech Points
– Biotech/life science remains a bright spot amidst the current pandemic and subsequent recession. Positive fundamentals, strong venture funding and public markets, etc. are driving this segment of the marketplace. – Layoffs in consumer-facing tech companies is a key driver behind the market’s rising sublease inventory. TAMI accounts for more than 35% of available subleases Downtown and 42% of available sublease in Cambridge. – Tech tenants with impending lease expirations are willing to let them expire without c committing to a new lease. Work-from-home policies have been sufficient or successful enough to allow these users to wait until 2021 or for a vaccine before going back out into the market again. – While there are fewer tenants in the market, TAMI tenants still account for roughly 25% of all requirements Downtown.
SimpliSafe
151K SF
145K SF
Markforged
2.5 MSF
2.2 MSF
Tech-related leasing was focused on the suburban office markets late in 2021. Oracle, Microsoft, Markforged and VMWare all executed leases within Boston’s Route 128 Loop during the fourth quarter. That said, expansions from home-grown, venture-backed tech firms like SimpliSafe bode well for Boston’s urban tech market.
Tech-related leasing activity improved throughout 2021, with total volumes more than doubling the lows experienced in 2020.
Some tech companies are downsizing their footprints – LogMeIn, Quickbase, Cayan, etc.
Continued flight to quality, focus on Class A, well-amenitized properties. Deals primarily driven by large and mid-cap companies. Small firms still sitting on sidelines with lower quality and cheaper suites sitting empty.
148,958
+1.8%
$176,058
+13.2%
...........................................
West – Route 128
Lexington & Waltham
$42.17
Average Asking Rent 1Q21
+7.0%
-14.3%
Net Effective Rent % Change from 1Q20
18.7%
19.3%
6.5
-4.3
-1.2
Tech Tenants Expanding or with Current Requirement
PTC
Formlabs
BitSight
50K SF
450K SF
$9.1B
$34.1B
Visient
Kimberly Clark
Hazel Technologies
53K SF
Fulton Market
River North
West Loop
North
The South Loop
4 Local Market Macro Tech Points
3.0 MSF
Total Coworking occupancy
1.2 MSF
$5.5 billion in funding which was an 84% increase from 2020.
15 - $100 million dollar VC raises in 2021.
108,872
+1.2%
$126,434
+13.4%
Lincoln Yards
$39.11
+3.9%
23.4%
21%
6.31
188
KSF
-255
denver
Chicago's tech salaries rose 3.5% to and average of $133,000 in 2021.
The war for tech talent remains fierce, forcing organizations to adopt remote and/or hybrid policies to stay competitive.
Project 44
Jelly Vision
Coin Flip
Tech tenants Expanding or with Current Requirement
$7.9B
Click Up
30K SF
Recursion
Reliaquest
Utah County North
Draper Tech Corridor
Southtowne
60K SF
Scorpion
Larger users are being patient, choosing not to make any significant changes right now. We continue to see subleases come out in the tech sector. Smaller users in the 5-25,000 sf range are actively searching for sublease opportunities, with plug-and-play opportunities moving most quickly. Investors continue to be very active in our market, purchasing buildings with tech occupancy and anticipating rising market rents. Very little new construction.
Tech sector vacancy sits at 9.4%, down from 12.2% a year ago. 60% less sublease space is on the market than a year ago.
291 k sf under construction presently, down from 1.1 m a year ago. We anticipate this number will stay the same wiht two new projects replacing deliveries in 2022, down significantly from the 10 year average of 1.2 m.
Average asking lease rates are steady at $26.20/sf Full service.
62,876
+4.5%
$114,238
+17.5%
$23.84
+2.0%
-1.6%
15.6%
16.2%
2.1
Salt Lake CBD
Byte
633
-116
Clickup
Significant interest from out of state companies looking to lower occupancy costs. This is not a new trend, but it's driving a significant portion of our leasing.
32 KSF
$1.0B
$4.0B
909 KSF
Reston
Herndon
Crystal City/Pentagon City (National Landing)
180K SF
Raytheon
550K SF
ID.ME
40K SF
4.2 MSF
3.3 MSF
Continue to see a flight to quality both in DC and the surrounding suburbs.
DC office vacancy at an all-time high of approximately 18%.
Most activity is being driven by large-cap companies, with mid-market organizations remaining hesitant to make decisions.
211,946
+1.0%
$145,339
+11.6%
$41.76
1.0%
22.7%
9.8
-3.4
East End
Tysons
I-270 Corridor
Urbana & Route 85
Riverside Research Park
Downtown Baltimore
washington dc metro
Capital One, the largest employer in Tysons continues to delay their return to work and is now targeting mid-2022.
atlanta
21.3%
-4.2
AT&T
BAE
Clarabridge
80K - 100K SF
200K - 230K SF
Notable 2021 Tech Leases
$1.27B
$5.5B
ABL Space System
Endeavour Content
100 Thieves
Riot Games
412K SF
LA Chargers
94K SF
4.7 MSF
4.5 MSF
Big tech, streaming content providers and video game companies drove office leasing activity in 2021—most of which was based in West Los Angeles.
Sublet availability continues to trend down in West Los Angeles as companies pursue Class A space at discounted rental rates.
Santa Monica and Culver City are especially active for requirements above 35,000 SF.
Institutional tech firms have a strong appetite for standalone trophy buildings in the 40,000- to 60,000-square-foot segment; brand-enhancement, privacy and control over one’s environment are among factors."
93,194
-1.8%
$147,201
+8.0%
$44.0
Average Asking Rent 1q21
0.0%
24.3%
21.2%
-4.9
9.1
Santa Monica
Playa Vista
Culver City
Hollywood
Thousand Oaks
San Gabriel Valley
LA Bioscience Corridor
Westside
Burbank
-3.6
Netflix, with 1.6 million square feet in the LA area, accounted for 15% of global internet traffic in 2020.
108K SF
6
Studio construction is increasing, with notable projects from Hackman Capital, Blackstone and Atlas Capital Group.
Meta
589K SF
Capital Factory
47K SF
Epicor
4.0 MSF
Leasing activty came back in strong in Q4 for the Austin area. Meta/Facebook led the way with their massive lease deal at 6X. Other companies signing deals in the 4th Quarter included Miro 72,000 SF, Capital Factory 46,662 SF, Epicor Software 40,843 SF, Canva 36,392 SF, J.P. Morgan Chase - 36,000 SF, Self, Inc. 29,022 SF.
Austin set a record in 2020 as it relates to new job announcements, largely powered by the Tesla announcement. 2021 numbers once finalized will surpass the 2020 numbers.
Samsung announced that Taylor, TX, a suburb of Austin, will be the location for their new $17B fab plant.
Austin set a record in 2020 with $2.26B in VC funding. Through three quarters of 2021, Austin based startups ahve raised $3.8B, shattering the record established in 2020.
76,060
+13.3%
$148,135
+14.2%
$40.35
7.54%
22.9%
2.64
CBD
North/Domain
Northwest
-1.8
205
Micron has narrowed down two finalists for the location of their next fab plant, and the greater Austin area is a finalist for this location as well.
Tik Tok / Byte Dance
300K SF
Cox Communications
Nvidia
400K SF
$1.04B
$4.96B
Epic Games
67K SF
1.9 MSF
37 MSF
Employers have stopped setting Return to Work Dates. Many have put a 2-3 week kibosh on using the office at all in January as Omicron numbers peak. In 2022, our expectations are Return to Work will be at the employees discretion.
Demand for office space in December in January, even in popular markets like Bellevue or Kirkland, slowed substantially as the market awaits the outcome of our most recent wave.
The Eastside will see 2-3 very high quality subleases hit the market this month that should offer some short term supply for technology users seeking value options in an otherwise tight and expensive market.
244,616
+6.6%
$232,594
+9.2%
$43.95
+5.0%
16.4%
13.9%
-956
5.21
Seattle CBD
Lake Union
Bellevue CBD
Bothell
213K SF
-54
1.3M SF
Snowflake
Outreach
250K SF
Zillow beat Q2 expectations with $1.3B in revenue. The company’s Internet, Media, and Technology (IMT) segment grew 70% in revenue year-over-year to $476M.
1 in every 5 Seattle employees now work in the STEM field, the highest rate of any city in the US. (Source: Seattle Times)
Seattle currently ranked 5th among all metro areas in venture capital funding at $3.2B year to date across 221 deals.
$2.2B
$7.3B
Twitter
85K SF
Retool
72K SF
2.7 MSF
Users seek amenitized office spaces with outdoor space. To motivate employees back to the office, office aesthetics and experience matter more than ever.
76% of all avialable sublease space is from tech companies disposing of their lease holdings.
Demand for flexible space continues to grow, as companies seek solutions to address their office needs during periods of uncertainty.
Since large blocks of available space were such a precious commodity over the last couple years, several tech companies land-banked space for future growth. Some of this space has come back on the sublease market, such as Dropbox putting 36% of its new headquarters space on the market for sublease.
230,929
$316,895
+27.5%
$77.82
0.87%
24.2%
20.2%
-7.4
6.74
SOMA
South Financial District
Mission Bay
4.8 MSF
52.0 MSF
Bay Area
-3.7
Tech accounted for 46% of the total leasing volume in the 4th quarter.
Sephora in the market for 250,000 SF
Square in the market for 200K sf for next-gen HQ
.....................................................................................................................................................................................
Chime pending 175,000 sf sublease
Yelp
Vir Biotechnology
134K SF
Square
Plaid
Databricks
125K SF
719K SF
Quantumscape
222K SF
NIO
$5.6B
VC Funding Q4
820 KSF
Flight to quality - 84% of office leases executed in 2021 were at Class A Properties.
Tech demand has increased during the pandemic and was relatively stable in 2021.
Many of the large tech leases this year were "adjacencies", or expansions into adjacent properties.
189,591
$332,458
+17.4%
$54.81
+11.1%
Average Asking Rent % Change from 1Q20
San Jose
Mountain View
San Carlos
40.9 MSF
50.8 MSF
Sunnyvale
Redwood City
Palo Alto
Waymo
Nutanix
1Q21 Average Asking Rent
$60.24
7.73%
14.96%
11.28%
-2.7
-1.1
3.32
Apple
$19.4B
VC Funding 2021
Boom Supersonic
287K SF
Nextworld
54K SF
Genapsys
75K SF
1.3 MSF
Colorado continues to aggressively pursue corporate relocations through economic incentives. The Economic Development Commission approved 34 awards for the state’s Job Growth Incentive Tax Credit program this year, which is more than double the number in 2020.
Life Science users continue to relocate to the market and expand rapidly. Landlords have taken notice, as multiple office and flex projects are undergoing conversion to deliver spec Lab finishes.
Rental rates will remain relatively stable in commodity buildings, however landlords continue to offer significant concession packages to attract and retain tenants.
Flight to quality continues, as LoDo and Cherry Creek continue to outperform against other micromarkets in Denver.
72,212
+5.2%
$135,296
+10.8%
$16.27
16.27%
Average Asking Rent % Change from 2Q20
Downtown (LoDo/CPV, RiNo)
Boulder
Aurora
2.6 MSF
Matillion
Dynatrace
Watchmaker Genomics
2Q21 Average Asking Rent
$29.70
7.23%
23.3%
-2.5
-2.9
3.5
$3.2B
$6.5B
Largest 2020 Tech Deals
3 Tech Tenants Expanding or with Current Requirement
Amazon | April-2020
70K SF
Shopify | December-2019
Kabam | March-2020
15K SF
143 MSF
Signficant demand on pre-built tech forward office space.
US based technology companies surging into the Vancouver market.
Digital content adjacent business driving demand.
95,643
$76,438
$45.83
7.3%
6.3%
1.36
Downtown Vancouver
Yaletown
..........................................
Mt. Pleasant
3.2 MSF
Gastown
Broadway Corridor
AMAZON
Vancouver, Canada
ANIMAL LOGIC
PING IDENTITY
michael.wright@nmrk.com
-320
-1.4
270,400
+3.5%
+2.40%
Animal Logic
Relic
110K SF
Amazon
Disney
$266M
$3.15B
Tipalti
27K SF
Notable Active Requirement
435K SF
Carvana
570K SF
1.5 MSF
Rivian's $5B investment for an assembly plant located 50 miles outside Atlanta metro shows that the Southeast is wining the EV manufacturing race.
Year-End 2021 occupancy levels neared 50%.
Atlanta continues to emerge into a hub for high-tech, characterized by a strong university system and top talant.
103,074
+6.4%
$115,074
+5.6%
$29.55
+2.32%
27.7%
27.0%
-220
6.0
Midtown
North Fulton
Central Perimeter
Midtown/Buckhead and North Fulton (Office)
Northeast/I-85 Corridor
Marietta/Kennesaw (Manufacturing)
AirBNB
-2.0
Visa
123K SF
CashApp
Zoom Communications
20K SF
QGenda
48K SF
Micron
93K SF
$477M
VC Funding Q4 – Tech
$3.5B
VC Funding 2021 – Tech
Kaseya Corp
26 KSF
Expedia
12 KSF
Lula Technologies
10 KSF
808 KSF
1.6 MSF
Wynwood and Brickell, Miami submarkets, are drawing tech and finance attention. Both have secured a significant roster of new tenants and expansion interest continues. The demand in Miami it primary being driven by companies in the New York and California area.
Hopes for sustained growth of the Miami tech sector hinges on the maturation of the tech startup culture which is linked directly to access to venture capital. Venture Capital firms such as Founders Fund, Atomic and SoftBank Group Corp have secured locations in Miami which would appear to be a significant step forward.
Miami outdoor spaces have been windfalls to many landlords which have been able to capitalized on the investments by securing partial or full rent on the dedicated rooftop deck spaces.
41,680
+4.1%
$135,923
+9.1%
$39.72
+3.46%
19.4%
-1.3
2.0
UTC
Sorrento Mesa
Rancho Bernardo
Torrey Pines
Sorrento Valley
steve.bruce@nmrk.com
san francisco
550
Atom Finance
Blockchain
$9.5B
Block Tower
Tonal
55K SF
Joe Fresh
51K SF
Spin Master
25K SF
A steady uptick in leasing activity continued through to the end of the calendar year.
$70,877
$38.50
-0.2%
Overall Availability Rate 2Q21
8.8%
-1.9
3.3
Downtown West
Liberty Village
Financial Core
Discovery District
Pill Hill
-2.4
+8.2%
+4.31%
An emphasis on new ready-to-go built out office space was the most sought-after space leased.
$731M
VC Funding – Tech
Tenants looking to the office 2.0 to encourage collaboration, idea generation and to bring culture back from the ZoomGloom.
1.0 MSF
$4.68B
VC Funding – 2021
Microsoft - Miami
Spotify
956K
112K
54,659
$108,170
$42.20
+3.3%
17.0%
20.1%
20%
-373
803
NEW YORK
25
SoftBank - Wynwood, Brickell
6 Local Market Macro Tech Points
FinTech companies are moving to South Florida at a faster pace than tech firms – increasing investable funds creates an increase in start-ups or expansion of existing operations.
SoftBank launching a $100M ‘Miami Tech Fund for Miami based startups – bolstering existing Miami-based companies and attracting new talent/companies to Miami.
Miami Mayor Suarez has committed to a long-term rebrand to shift the perception of Miami as solely a vacation destination to a multi-faceted tech hub by being a business-friendly environment and responsive to the needs of the incoming tech companies.
Miami’s climate, diverse population and lack of state income tax attracting VC, Hedge Fund & PE leaders to the state acting as ambassadors for others to follow suit.
Technology industry job growth has increased 82% over past 8 years.
Many top universities rumored to be opening graduate program outposts in South Florida, specifically Miami, which will attract and retain necessary talent to bolster growth of tech and media operations in Miami.
Papa
11K SF
Apple - Wynwood, Brickell, Downtown Miami, Coral Gables
Fiserv - Miami Airport/Doral
10.7%
+12.2%
Zumper - Wynwood, Brickell, Downtown Miami
$1.4B
