Virus outbreaks wrecked commercial real estate markets. The greater Seattle area reaped the benefits of this development.
CBRE, a market research organisation, predicts a 36% drop in office leasing activity in the United States in 2020 when compared to the previous year, as businesses close and employees work from home.
Technology Firms In The Seattle Area Occupied More Space This Year Than In The Previous One
To catch up with the San Francisco Bay Area and other tech centres, CBRE estimates that the Seattle area will surpass the San Francisco Bay Area in 2020 as the top market in the United States for large office spaces leased by tech businesses for the first time since 2013. With 14 agreements totaling 3.4 million square feet – or approximately 85 percent more space than Manhattan, the list’s No. 2 market – Seattle accounted for 14 of the top 100 largest technology leases in the country.
Many things contributed to the popularity of Seattle. Technology companies expanded their footprint in Seattle as a result of the pandemic, drawn by a deep talent pool and a steady stream of graduates from local colleges; and the area just outside the city had plenty of undeveloped land. During the pandemic, Americans worked from home, shopped online, and entertained themselves.
According To The Commerce Department
The U.S. economy will shrink by 3.5% in 2020, but the technology industry will soar as e-commerce, streaming entertainment, and virtual meetings all grow in popularity. Google, Amazon, Apple, Facebook, and Microsoft all saw a 25 percent increase in revenue in 2020, according to corporate figures. Alphabet, Amazon, and Apple each saw a 25 percent increase.
According to Anthony Paolone, co-head of J.P. Morgan’s U.S. real estate stock research, despite the trend toward remote work, this massive expansion produced a demand for office space. ‘There’s a net need for accommodation,’ he explained.
In places with a high concentration of colleges, technology companies have also begun to build satellite offices employing hundreds of employees, according to Colin Yasukochi, executive director of CBRE’s Tech Insights Center.
He said that there is a “want to promote diversity” by establishing a presence in cities like Atlanta, Miami, and Washington, D.C., which have large populations of Black and Hispanic individuals who are underrepresented in technology. For example, according to Yasukochi, IT jobs were few in Chicago, thus graduates who desired to work in the city had to relocate after graduation. This is beginning to change, though, as companies like Google, Facebook, and Amazon have established operations in the city.