Tech Demand Should Traverse US

NEWPORT BEACH, CA-While certain markets have been experiencing more creative-space demand from tech firms recently, this phenomenon will trickle down to other markets throughout the country, CBRE's Gary Baragona, research manager; Jason Katz, associate; and Simon Dillon, FVP, tell GlobeSt.com. This type of space is particularly hard to come by in Orange County.

As we reported earlier this week, high-tech tenants are seeking creative-office space in Orange County, but they are limited in their options because of short supply, according to CBRE. This demand is driving rental rates north in certain submarkets of the county, including Irvine, Anaheim Stadium Area and parts of South Orange County, where the majority of the region's tech firms are located.

The CBRE team says that while Orange County is an “immature” tech market compared to others in the US like San Francisco and Seattle, “there has been an increased demand from tech companies during the past eight to 12 months. However, because the market is still evolving, there is not enough available space to accommodate the current demand. The Orange County tech market is still growing and evolving as Irvine Spectrum leads the way with regard to demand while emerging pockets are growing in the Airport office area and the Irvine Business Complex.”

One way that landlords are attempting to meet the current demand is by converting traditional space environments into non-traditional space, looking to leverage the desire for most tech firms to locate within creative-office space and alternative workplace solutions, the team says. “These tech tenants are drawn to a more exciting live, work and play environment and typically cluster in a more urban environment with many nearby amenities. Orange County still has plenty of room to grow in that regard, but landlords are starting to think differently about their properties in both design and image in order to capture the growth demand from tech companies and other creative-office users.”

The firm recently released its Tech 20 report which offers a glimpse into the recent success of the tech industry and its impact on commercial real estate. “Although the US is continuing to experience a slow economic recovery, the tech industry is currently maintaining a high growth trajectory across the US,” the team says. “This effect has and will continue to trickle down to most markets across the country, including both Los Angeles and Orange counties.”