Washington, D.C. Area Ranks First Nationally in Tech Office Leasing in Second Quarter

Washington, D.C. Region Tech Office Leasing Nearly Doubles the Volume of San Francisco’s with 1,445,528 sq. ft.

Washington, D.C. – August 14, 2020 –The Washington, D.C. region ranked first nationally with 1,445,528 sq. ft. in tech office leasing in the second quarter. This is a 55 percent increase from the 2019 quarterly average. according to a new report from CBRE.

“The D.C. area continues to be an attractive market for technology companies. In the second quarter, Northern Virginia lead the region in tech-office leasing with 1.1 million square feet -- 76 percent of the region’s total -- and led overall market demand.  As the second-ranked tech talent market in the U.S, with a highly educated workforce, large concentration of millennials, and significant tech job creation, the D.C. area’s tech-office leasing sector is well poised to capitalize on the next growth cycle and thrive as the pandemic subsides, ” said Meredith LaPier, Vice Chairman at CBRE.

In the D.C. area, tech-office leasing continues in an upward trajectory, making up 44 percent of total office leasing in the first half of the year. This marks an increase from 21 percent in 2018 and 29 percent in 2019. Additionally, Northern Virginia has remained strong as tech firms have contributed 2.5 million sq. ft. of occupancy gains there, accounting for the majority of demand growth (76%) in the market since the beginning of 2018.

U.S. office space leased by tech companies in the second quarter amounted to more than 6.8 million sq. ft., which marks a 46 percent decline from last year’s quarterly average. That’s roughly in line with the 44 percent decline in new office leases by all industries last quarter. Overall, tech remains the most active industry in U.S. office leasing, accounting for 20.5 percent of square footage newly leased last quarter.

“The tech industry has proven resilient during the pandemic with many companies experiencing increasing demand for their products and services,” said Colin Yasukochi, Executive Director of CBRE’s Tech Insights Center in San Francisco. “Even so, many tech companies’ real-estate plans have been put on hold until more clarity emerges on business conditions and the economy. When tech companies return to the office market, they’ll likely find better leasing opportunities at lower costs.”

Busiest US Markets For Q2 2020 Tech-Office Leasing

The only other market within the 10 most active to post a gain in the second quarter was San Diego, which generated 365,687 sq. ft. of tech-office leases in the quarter for a 58 percent gain from its 2019 quarterly average.

The reverberations of the pandemic and recession on U.S. office leasing still are unfolding. So some impacts aren’t yet fully apparent. The steepest rent declines so far have come in the downtowns of tech hubs San Francisco (down 5 percent) and Seattle (down 4 percent).

To read the full report, click here.