High Tech Drives Office Fundamentals

SAN FRANCISCO-New tech-oriented submarkets around the U.S. and Canada have been created by strong growth in high-tech sector hiring and increasing competition among firms for talent, says a newly released high-tech-industry report from Jones Lang LaSalle. The firm estimates that high tech accounts for nearly one-third of recent office-market absorption nationwide, and the top five markets—Boston, New York, Silicon Valley, San Francisco and Seattle—recorded annual rent growth across key tech-oriented submarkets of between 16.8% and 57.9% in the first quarter.

“Despite high-tech’s relatively small footprint in office markets, accounting just 8.5% of all jobs using office space, it has had a tremendous impact on the absorption of office space in the top five tech-oriented markets,” says Colin Yasukochi, northwest director of research for JLL. “Additionally, the sector’s recent employment growth—roughly three times the overall US employment rate—has begun to affect a growing number of other markets around the US and Canada.”