Tech Jobs Now Make Up 25 Percent Of All Office-Using Jobs In Austin

08 Nov 2018

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According to CBRE’s 2018 Tech 30 report, Austin continues to rank highly in the U.S. for tech industry market growth.

Most notably, high-tech software and services jobs now make up approximately 25 percent of all office-using jobs, up from just 16 percent in 2011.

“What this research shows is that tech is driving a tight, competitive office market here in Austin,” says Troy Holme, Executive Vice President at CBRE in Austin. “Large tech firms now make up the top users in Austin’s CBD, and they are still expanding. We expect the percentage of office-using jobs from the tech sector to continue to rise.”

This increase in office-using jobs from the tech industry correlates to Austin’s ranking as #6 among the Tech-30 markets for overall office net absorption growth.

“One of the unique aspects of the Austin market is that the office sector development cycle this time around has been very controlled,” continues Mr. Holme. “Despite high demand, we are not seeing much office space being built on spec. Instead, office developments often have a pre-leasing commitment (20-50 percent leased) before they break ground and are at stability (90-100 percent leased) when they deliver to the market. In this environment, as landlords continue to do well, they keep pushing the envelope of higher rents and fewer concessions.”

Austin is also considered a growth leader market in the U.S. due to its overall tight office market and high-potential for job strength in the tech industry.

Impact of Tech Job Growth on Office Markets

The influence of tech job creation on office market growth is pervasive across the U.S. and Canada, with eight of the Tech-30 markets posting rent growth of 10 percent or more between Q2 2016 and Q2 2018. Office rents also increased in 26 of the 30 primary tech submarkets over the same period.

Top 10 Office Markets by Rent Growth

MARKET

RENT GROWTH RANK

RENT GROWTH RATE Q2’16- Q2’18

TECH JOB GROWTH RATE (% CHANGE ’16-17)

Atlanta

1

16.3%

10.7%

Los Angeles

2

15.8%

14.7%

Orange County

3

15.5%

14.5%

Seattle

4

13.9%

25.7%

Portland

5

13.8%

12.8%

Charlotte

6

13.7%

15.4%

Raleigh-Durham

7

12.8%

10.2%

Nashville

8

12.3%

12.3%

Denver

9

9.6%

12.5%

Washington, D.C.

9

9.6%

3.9%

 

“As space availability in top tech submarkets continues to tighten, we expect large tech companies to continue to expand outside their headquarters markets—including further into secondary and even tertiary markets. Large tech company expansion into smaller markets will help foster innovation clusters, further boosting job creation and creating additional office demand,” said Colin Yasukochi, director of research and analysis for CBRE in the San Francisco Bay Area.

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 2021 revenue). The company has more than 105,000 employees (excluding 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.