Tech companies doubled their share of the largest 100 U.S. office leases agreed to in 2021, underscoring the sector’s leading role in the office-market’s recovery, according to a new report from CBRE.
Nationally, tech companies accounted for 36 of those top 100 leases, up from 18 in 2020. In terms of size, tech companies claimed a cumulative 11.4 million sq. ft. of the top leases, or 37 percent of the total square footage. Those 2021 totals exceed the year-earlier figures of 6.8 million sq. ft. and a 24 percent share, respectively. Tech’s pre-pandemic share was 32 percent in 2019.
Locally, Metro Atlanta had three office leases crack the top 100. These three leases accounted for just over 1.1 million sq. ft., according to CBRE Research. Tech companies were responsible for two of these leases. Two of the three largest leases were also brand new, while one was a renewal. All three of the metro’s largest office leases occurred in suburban submarkets, including Central Perimeter, North Fulton and North Lake.
Tech markedly outpaced the leasing activity of other active industries within that largest-100 category last year: government and public administration at 5.1 million sq. ft.; finance and insurance at 3.6 million; life sciences at 1.8 million; legal at 1.7 million; and creative industries at 1.6 million.
“Atlanta’s tech sector has been growing at a tremendous pace over the last few years and has benefited from a quickly maturing local ecosystem as well as talent in-migration from other major markets. To see that these companies represented some of last year’s largest office leases in Atlanta doesn’t surprise me a bit,” said Christian Devlin, Senior Vice President at CBRE and Atlanta leader of CBRE’s global Tech & Media Practice. “As the rest of the country continues to learn about our region’s large, highly-skilled, and diverse tech talent base, along with the high quality of life and relatively lower cost of living and doing business that Atlanta offers, I expect that we will continue to see tech companies make strong plays locally.”
Overall, last year’s top 100 office leases were larger and, in a sense, newer than in 2020. Specifically, the average size of those top leases in 2021 was 307,000 sq. ft., up 7 percent from a year earlier. And 61 percent of last year’s top leases were new leases or expansions as opposed to renewals, an increase from 57 percent a year earlier.
As is typical, big, gateway markets registered the biggest shares of the top-100 office leases of last year. Manhattan, Washington, D.C., and Boston notched big leases by the tech and government sectors.
Leading Markets for Largest 100 Office Leases of 2021
| Market | Number of leases in Top 100 | Cumulative Size of Those Leases |
| Manhattan | 15 | 4.6 million sq. ft. |
| Washington, DC | 9 | 3.4 million |
| Boston | 9 | 3 million |
| Silicon Valley | 6 | 2.4 million |
| Northern New Jersey | 5 | 1 million |
| Seattle | 5 | 1.5 million |
| San Francisco | 4 | 1 million |
| West Los Angeles | 4 | 1 million |
| Chicago | 3 | 1.1 million |
| Atlanta | 3 | 1.1 million |
“Companies are increasingly getting comfortable with making long-term commitments like office leases, given job gains in office-using sectors and the slowdown of COVID-19’s omicron variant,” said Julie Whelan, CBRE’s Global Head of Occupier Research. “Rising optimism should be tempered with caution even with the pandemic seemingly easing. Still, the runway seems clear for leasing momentum to continue in 2022.”
To read the full report, click here.
Article courtesy of Metro Atlanta CEO, published March 11, 2022.