San Francisco Still King of Tech Job Growth Says CBRE
Tech is still king in San Francisco. This techy city boasted a 47% tech job growth rate, adding 22,000 new high-tech jobs from 2013 to 2015, according to CBRE’s annual Tech-Thirty report, which analyzes high-tech software/service job growth in 30 tech markets in the US and Canada.
Silicon Valley added the most high-tech jobs with 28,000 new jobs over the last few years and had the highest overall rent growth and net absorption with rents increasing 28.4% from Q2 2014 to Q2 2016. Silicon Valley tenants absorbed over 10% of office stock during this time. San Francisco wasn’t too far behind with its asking rent increasing by 22.7%.
In San Francisco, 54% of leasing activity during H1 2016 was from tech office leasing. Nationwide, tech leasing accounted for 20% of office leases for the first half of this year compared to 18% during the first half of 2015.
In the US, tech job growth went from a rapid to brisk pace during the first half of this year due to tightening of venture capital and equity markets resulting in increased sublease space. By mid-year, growth resumed and increasing demand drew down sublease space and kept rents steady in top tech markets, according to CBRE.
Top submarkets outperforming their overall markets are Palo Alto, East Cambridge and Santa Monica. Outside of the Bay Area high-tech job growth is increasing rapidly in Phoenix with 44.5% growth, Austin at 33.3%, Charlotte at 33.2% and Indianapolis at 27.9%.