Tech Space Still Runs 15% Cheaper To Build Out Than Traditional Office Space

Photo credit: JLL
Capitol Tower, Ninth Street, Austin

As tech companies continue to dominate leasing in the Austin office market and a few others around the U.S., national tech space is nearly $30/SF cheaper to build out than traditional office.

The office space set aside for tech companies has specific attributes, according to a fall report out of JLL. Tech space is flexible, frequently taking advantage of mobile benching, fully movable acoustic walls and so-called "unrooms," which are three-sided standing conference rooms. The goal is to provide space both flexible enough to grow and versatile enough to be configured into common meeting space.

In "What's That Cool Office Space Going To Cost You," JLL broke down the cost of tech office space against traditional office space and across markets. Overall, tech office space is $77/SF in hard costs, compared to $98 for traditional space. Once design and contingency fees are added, tech office space still costs $30 less per foot.

The key is common areas and collaborative spaces in the tech company model, according to the report. Open space, flexible workspaces, concrete floors and exposed brick can often be cheaper than traditional counterparts.

The caveat is that money that does not go into building office space will often go into furniture, audio, visual and technology amenities. Those extras can frequently go for $50/SF, according to JLL's estimates.

Comparisons by market show hard costs and tech build-out in Austin run about 4% over the national average. By comparison, similar office space in San Antonio runs about 10% below the national average. Sacramento runs 30% over the national average. Houston runs almost 29% below the national average.

The build-out of tech office space picks up many of the amenities the millennial tech worker has come to expect: fully catered cafés; choose-your-own workspace; and fully equipped roof decks and outdoor plazas.

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