Office Rents Increase Faster in Tech Hubs

Jolanta Campion

Office rents are growing the fastest in tech hubs, or that is where technology industries are critical to the local economy. In the recent Tech Cities 2.0 report from Cushman & Wakefield, San Diego ranked as a tech critical market, and its office rent growth reflects the ranking. From 2010 to 2018, office rents have increased 31.4%, compared to 24% in the US. Tech has also had a significant impact on office leasing activity and has helped to fuel the rise of co-working space in the market.

“The tech sector has been an important driver of demand and value in current real estate cycle,” Jolanta Campion, director of research for San Diego, tells GlobeSt.com. “Rents have increased faster in tech markets than in the rest of the U.S. metro areas and most substantially in tech critical cities such as San Diego. For occupiers, any sharp increase in rents may make these markets less attractive. However, compared to San Francisco where rents have increased 135%, San Diego offers less expensive space, plenty of tech talent and is located an hour flight away from San Francisco.”