Another new report is shining a light on Seattle’s rapid growth among leading tech hubs.
CBRE’s annual Tech-30 report, which measures the tech industry’s impact on North American office real estate markets, shows Seattle is the sixth fastest growing tech market in overall office rent growth. Rents jumped 12.4 percent between Q2 2017 and Q2 2019, up from 11.7 percent in the previous two-year period, CBRE reported.
Seattle is also fourth in tech employment growth, with a rate of 23.7 percent during 2017 and 2018. The 34,000 new jobs added in the market were the highest number among any of the Tech-30 cities.
Vancouver, B.C., San Francisco and Toronto were the top three markets ahead of Seattle in the overall ranking of the 30 markets.
“Seattle’s tech industry is among the largest in North America and is growing at a rapid pace,” said CBRE’s John Miller, senior managing director of the firm’s Seattle office. “This growth, combined with the second strongest tech labor pool in North America, means we’re going to continue to attract tech firms looking to take advantage of our intellectual capital, which will continue to strengthen office fundamentals.”
Major technology companies have leased nearly 2.8 million square feet of office space in the past year, accounting for 45 percent of all leasing activity in the Puget Sound market, CBRE reported. Much of this space is for expansion purposes, which will add even more jobs to the tech industry in the near-term. And perhaps they will be filled by area tech grads, whose number grew by more than 60 percent.
The report also looked at rent gains, rent premiums and net absorption in submarkets that are hot tech spots in the larger overall markets. South Lake Union, home to Amazon and major tech outposts for Facebook, Google and Apple, showed a 6.4 percent rent growth in the past two years and commands a 13.4 percent premium over the overall market average, CBRE reported.
The neighborhood’s net absorption of 8.8 percent — versus the city’s overall net absorption rate of 5.3 percent between Q3 2017 and Q3 2019 — ranked it at No. 9 among the Tech-30.
CBRE’s report comes on the heels of last week’s Q3 2019 PayScale Index, which tracks quarterly and annual trends in compensation, and found that wages increased 4 percent year over year in Seattle. The city outpaced the national average of 2.6 percent and only trailed San Francisco, at 4.3 percent.
Read the full report here.