Tech’s grip on largest office leases loosens
Tech has been toppled as the leader in leasing large offices.
Why it matters: The pullback comes as the roller-coaster tech industry downsizes after a decade-long boom.
Driving the news: The finance and insurance industry ousted tech last year for the lion's share of the largest 100 office leases in the U.S., per a new report from CBRE, a commercial real estate firm, first shared with Axios.
Finance and insurance companies claimed a quarter of the largest 100 leases by square footage, up from 12 in 2021.
- Tech companies accounted for 17 of the largest 100 leases, down from 36 in 2021.
Between the lines: Finance and insurance companies generally have higher office attendance rates than tech, which was quick to embrace remote work, CBRE surveys show.
- In 2022, as layoffs swept tech companies, many firms abandoned their big office spaces — either by downsizing or moving primarily to a remote-work model.
What they're saying: The wide range of industries that signed top leases last year reflects a commitment “to remain in great locations and provide office environments that employees want to work in,” Julie Whelan, global head of occupier thought leadership at CBRE, tells Axios.
Manhattan, Northern Virginia and Silicon Valley led with the most square footage among their large office leases.
What's next: The prospect of a recession will slow leasing in the short term, says Whitley Collins, CBRE's global president for advisory and transaction services.
- "But, in the longer term, the need to provide offices that support the future of work will continue to drive leasing activity,” Collins says.