Future Cities

Tech Retains Office Space Leasing Crown

TechInsights | March 2021

March 29, 2021

man and woman working at a computer desk

Tech Retains Office Space Leasing Crown

Tech companies leased more office space than any other industry last year although both the aggregate square footage they leased and their share of total office leasing declined from 2019 levels. Total U.S. office leasing activity decreased by 36% year-over-year in 2020, with tech leasing down by 48% to 26 million sq. ft. Although tech’s share of total leasing fell to 17% from 21%, it has remained the top industry for office leasing since 2013.

New transactions representing expansions and relocations dominated the top 100 office leases by tech companies last year. Most of them were in Seattle, Manhattan, Washington, D.C. and Atlanta and involved software, e-commerce and tech business services companies. These 100 transactions represented 57% of total tech leasing and averaged 149,000 sq. ft., compared with 53% and 251,000 sq. ft., respectively, in 2019.

Seattle claimed the top spot with 14 of the 100 largest tech office leases totaling 3.4 million sq. ft., slightly more than the aggregate space leased there in 2019. Manhattan was second and Washington, D.C. climbed from sixth to third by virtue of a 72% increase in its leasing volume within the top 100. Atlanta, Austin and San Diego were top 10 markets for the first time in 2020, displacing Phoenix, Dallas/Ft. Worth and Nashville.

Progress in containing COVID-19 is starting to trigger office occupier’s portfolio planning and implementation strategies. Once in-office work returns more broadly in the second half of 2021, companies will have greater insight into their space needs, leading to increased leasing activity.