Chapter 7

How does Tech Talent impact commercial real estate?

Scoring Tech Talent 2025

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The high-tech industry has once again become a top driver of U.S. office leasing activity with rapid growth of AI-related companies. Tech companies accounted for 17% of total U.S. office leasing activity5 over the past two quarters, which is a large increase from 10% in late 2022.

Prior to the pandemic, many tech talent markets, especially those with high concentrations or clusters of tech companies, had seen rising office rents and declining vacancy rates. But since early 2020, all but three markets have seen office vacancy rates increase, with Chicago (27%) having the highest as of Q4 2024. Compared with pre-pandemic Q1 2020, rents in the San Francisco Bay Area were 14% lower in Q4 2024. South Florida, Austin, Nashville, Tampa, Dallas-Ft. Worth, Vancouver and the Waterloo Region had rent growth of 20% or more over the same period (Figure 36).

Tech talent continues to impact office markets through work-from-home and return-to-office policies. As hybrid work arrangements become more common, tech employers are still implementing office space strategies. While many have downsized, others have maintained their portfolio size to accommodate large team meetings and ensure that there is sufficient space for collaboration.

5 Includes leases of 10,000 sq. ft. or more each quarter for the 50+ markets tracked by CBRE Research.

Figure 36: Office Asking Rent & Vacancy Rate by Market (Q4 2024)

Source: CBRE Research (Office Market), Q4 2024.
* New York represents Manhattan only, all others are metro area.
Since early 2020, all but three markets have seen office vacancy rates increase, with Chicago having the highest as of Q4 2024.

The in-migration of talent to these tech markets also has a sizeable impact on residential real estate. Apartment rents have increased in 44 of 50 markets since 2021. Manhattan was the most expensive last year with an average monthly rent of $3,573 (Figure 37).

Comparing the annual average apartment rent with the annual average tech-worker salary shows that tech salaries generally can cover the cost of living in most of the priciest markets (Figure 38), based on the affordability standard of 30% of income to housing.

The COVID pandemic fundamentally changed real estate market dynamics across North America. How companies use office space and where people choose to live is unlikely to revert to pre-pandemic patterns. Technology’s importance in society and to real estate utilization has been accelerated and disrupted. This will create new opportunities for both real estate occupiers and investors in tech talent markets.

Figure 37: Average Monthly Apartment Rent by Market (Q4 2024)

Source: CBRE Econometric Advisors, Axiometrics, CMHC, Q4 2024.
* New York represents Manhattan only, all others are metro area.
** 2021 to 2024.
The COVID pandemic fundamentally changed real estate market dynamics across North America. How companies use office space and where people choose to live is unlikely to revert to pre-pandemic patterns.

Figure 38: Ratio of Apartment Rent to Average Tech Wage by Market (US$)

Source: U.S. Bureau of Labor Statistics, Statistics Canada, CBRE Econometric Advisors, Axiometrics, CMHC, 2025.
* New York represents Manhattan only, all others are metro area.

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Chapter 8 What are the up-and-coming markets for Tech Talent?
Chapter 6 How is Tech Talent quality vs. cost measured?