February 12, 2020
  • Tech companies accounted for nearly one-third of the 100 largest U.S. office leases in 2019.
  • Almost three-quarters of the top 100 leases were in only 10 markets, with the dominant industry makeup of tenants varying considerably by market.
  • Tech companies should continue to dominate large lease transactions in 2020. Almost 40% of the 100 largest U.S. office tenant requirements are from tech companies.

Technology companies dominated overall office leasing activity in 2019, accounting for 21.9% of space leased in U.S. offices. But of the nation’s largest 100 leases last year, 32.4% or 13.1 million sq. ft. were by tech companies. Other industries with larger shares of the top 100 leases vs. their shares of overall leasing activity were energy (7.2% vs. 3.1%) and government & non-profits (11.2% vs. 6.7%). At the other end of the spectrum, business services and flexible office operators (coworking) were underrepresented in the top 100 leases compared with their shares of overall 2019 leasing activity.

Figure 1: Top 100 Leases Compared with Share of Overall Leasing by Industry, 2019

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Source: CBRE Research, Q4 2019.

Nearly three-quarters of the top 100 leases were in 10 markets. Manhattan led with 23 leases totaling more than 11 million sq. ft. or 26.8% of the top 100, followed by Washington, D.C. with 10 leases totaling 3.7 million sq. ft, or 9.7%.

In Manhattan, eight of the 14 major industry sectors were represented among the market’s top tenants, exemplifying the diverse tenant base that is the long-term strength of that market. Dallas/Ft. Worth and Phoenix also had a diverse mix of tenants by industry. In contrast, Houston (energy) and Seattle (technology) each had a single industry account for their largest leases. San Francisco and Washington, D.C. also were highly concentrated, with nearly 80% of their top 100 leases by one industry (technology and government & non-profits, respectively).

Figure 2: Industries of Top 10 Markets

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Source: CBRE Research, Q4 2019.

Tech tenants account for even more of the 100 largest office tenant requirements currently in the market. Other industries with large requirements include financial services & insurance and government & non-profits. On the other hand, the share of large office requirements by tenants in the manufacturing & transportation, creative and energy industries is lower than their share of 2019 leasing volume, suggesting slower activity from them in the near term.

Figure 3: Near-term Outlook for Top 100 Leases

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Source: CBRE Research, Q4 2019.

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