Brief | Intelligent Investment

2020 Tech-30

Measuring the Tech Industry’s Impact on U.S. & Canada Office Markets

September 2, 2020

Tech Office Leasing Stalls in Q2; Percentage of Renewals Increases

Economic and business uncertainty caused U.S. office leasing activity to decline by 44% overall and by 46% for the tech industry in Q2 2020 compared with the 2019 quarterly averages. Many companies placed expansion and relocation plans on hold, and a focus on immediate occupancy decisions led to a rise in renewals.

Renewals comprised a relatively low share of tech companies’ total office leasing activity leading up to the COVID-19 pandemic, reaching a low of 15% in 2018 before rising to 35% in Q2 2020.

A similar trend was evident for all U.S. office leasing activity. Compared with other industries, tech had the lowest share of renewals at 35%, while legal had the highest at 62%. Government (50%), financial services and insurance (48%) and business services (47%) rounded out the five most active industries for lease renewals in Q2 2020.

U.S. Office Leasing Activity – Renewal Market Share

Renewal Transaction Share of Total Leasing Activity

techInsights_renewals-figure-01v2

Source: CBRE Research and CBRE Tech Insights Center, Q2 2020. Total leasing activity includes direct, sublease and renewal transactions ≥ 10,000 sq. ft.