Job growth in the high-tech sector is fueling strong rental rate growth and declining vacancies in tech-oriented office markets across the US. So says a recent report entitled “Tech-Twenty Office Markets,” put out by CBRE global research and consulting. “The strengths of these tech-centric office submarkets, with strong rental rate growth and declining vacancies, are major factors supporting the overall office market recovery,” notes Colin Yasukochi, CBRE’s director of research and analysis. According to Yasukochi, “With the high-tech economy growing nearly six times faster than the national average, we expect that these submarkets will continue to outperform, helping to counterbalance tepid job growth in other sectors and the uncertain economic environment.”
The strong job growth in the tech sector was most impactful in the San Francisco, New York City and Silicon Valley office markets. Rental growth was strongest in Silicon Valley’s Mountain View submarket, with 83% growth, followed by San Francisco’s SOMA submarket, at 59%; Boston’s East Cambridge submarket, at 28%; and New York City’s Midtown South, at 24%. Other cities to watch in terms of future office market potential, according to the report, include Salt Lake City, Denver and Portland.