Salt Lake City, UT

Salt Lake City’s High-Tech Job Growth Puts City’s Office Market Among the Hottest of North America’s 30 Leading Tech Hubs

Salt Lake City is one of five markets identified as resilient and in a position for new growth.

November 1, 2023

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Salt Lake City ranks among the most active tech markets in North America for office leasing activity this year, buoyed by the city’s growth in tech employment exceeding the national high-tech job growth rate average, according to CBRE’s annual Tech-30 report.

Salt Lake City’s 22.9% growth in tech jobs in 2021 and 2022 exceeded the U.S. high-tech job growth of 10.1% from 2020 and 2021, moving Salt Lake City’s ranking up from #11 to #4 among Tech 30 markets. Rent growth in the Salt Lake City office market was 5.5% from Q2 2021 to Q2 2023, only slightly higher than the 5.4% growth from Q2 2019 to Q2 2021. South Valley and UT City North, the city’s premier tech submarket, posted 3.9 rent growth between Q2 2021-Q2 2023.

“Salt Lake City is positioned for renewed growth, as clearly proven by our continued high-tech job growth and rising rankings in this report,” said Eric Smith, a senior vice president at CBRE in Salt Lake City and a member of the firm’s Technology Practice Group. “Our market has been called out as having one of the best combinations of future tech demand drivers and office market fundamentals, making it one of the most resilient as measured by CBRE in North America.”

The report, now in its 12th year, measures the tech industry’s impact on office demand and rents in the 30 leading tech markets in the U.S. and Canada, as well as select tech-heavy submarkets.

Tech’s share of total office leasing activity has increased each quarter this year, even amid reduced U.S. office leasing activity overall. In Q3 2023, the tech industry reclaimed its position as the top sector in office leasing activity after losing its lead in Q1 2022. Tech’s share of office leasing was 16.5% (7.3 million sq. ft.) in Q3 2023, up from a 10-year low of 9.3% (3.9 million sq. ft.) in Q4 2022. Tech moved back ahead of the finance and insurance sector, which claimed a 15% share of Q3 office leasing activity.

The report features a new analysis of the correlation between venture capital (VC) funding and leasing activity by AI companies. The top five U.S. markets to receive VC funding across all sectors between H1 2019 and H1 2023 (San Francisco, Silicon Valley, New York, Boston and Los Angeles/Orange County) also have the highest amount of office leasing activity by AI companies in that timeframe, according to CBRE’s analysis of its office leasing and CB Insights data.

Since 2019, AI companies have leased 7.5 million sq. ft. of office space across the top five markets. San Francisco and Silicon Valley were the most active markets for AI leasing by volume, each with over 2 million sq. ft. leased.

“Tech-office leasing has steadily increased this year across the U.S., but short-term momentum could shift along with the economy. To be sure, long-term growth prospects of the tech industry remain strong with ample capital to fund innovation,” said Colin Yasukochi, executive director of CBRE’s Tech Insights Center in San Francisco. “Investment in emerging technologies like artificial intelligence can produce significant economic value, employment and office space demand. The impact of AI on business growth has the potential to reach the same scale as the mobile internet, which would result in significant demand in the Tech-30 markets.”

Total U.S. tech industry employment remains well above pre-pandemic levels, even though tech software and services employment growth decelerated to 0.4% in H1 2023 from 3% in H2 2022. September 2023 marked the fewest tech industry layoffs since June 2022, according to CBRE’s analysis of data from job search firm Challenger, Gray & Christmas.

Salt Lake City’s tech workforce of 59,622 people amounts to 17.2% of all office-using positions in the city. Another growth marker: nearly 70% of all venture capital funding in the Salt Lake City market goes towards tech, which totals to just under $130 million.

Submarket Performance

Leading tech submarkets, which often are located near universities or major tech employers, typically feature higher rents, lower vacancy and high-quality office space than their cities. CBRE found that office rental rates in leading tech submarkets carried a 10.2% premium in Q2 2023, compared with rents for their cities as a whole. Those with the largest premiums are Boston’s East Cambridge (107%), Silicon Valley’s Palo Alto (57%), Pittsburgh’s Oakland/East End (52%), Santa Monica (52%) and Philadelphia’s University City (47%).

Top Tech-30 Submarkets For Office-Rent Gains

Subarket Two-Year Submarket Rent Growth*
Downtown West (Toronto) 21%
River North (Chicago) 17%
Northwest (Austin) 15%
Tempe (Phoenix) 14%
Sorrento Mesa (San Diego) 14%
Far North (Dallas/Ft. Worth) 13%
Central Business District (Nashville) 13%
Lake Union (Seattle) 11%
RTP/I-40 Corridor (Raleigh-Durham) 9%
University City (Philadelphia) 8%

*Q2 2021 VS. Q2 2023

To read the Tech-30 report, click here.

About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2023 revenue). The company has more than 130,000 employees (including Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.