The pandemic was a disaster for commercial real estate markets. In the Seattle area, it was a boon.
In 2020, U.S. office leasing activity fell 36 percent from the year before, according to the industry research group CBRE, as offices closed and employees were sent home to work remotely.
But in the Seattle region, technology companies gobbled up more space than they had the previous year.
The Seattle region became the top market in the United States in 2020 for large office spaces leased by tech firms, according to CBRE, surpassing the San Francisco Bay Area for the first time since 2013, as well as tech hubs like Atlanta, New York, Washington and Austin, Texas. Among the 100 largest technology leases, 14 were in the Seattle area, totaling 3.4 million square feet, about 85 percent more space than in Manhattan, the No. 2 market on the list.
A confluence of factors spurred Seattle’s popularity. The technology sector grew during the pandemic as Americans worked, shopped, and entertained themselves from home; tech companies expanded their footprint in Seattle, attracted by a deep talent pool and a stream of graduates from local colleges; and the area just beyond the city had plenty of undeveloped lands.
The U.S. economy contracted 3.5 percent in 2020, according to the Commerce Department, but the technology industry soared on the surge in e-commerce, streaming content, and virtual meetings. The biggest tech companies — Alphabet, Amazon, Apple, Facebook, and Microsoft — thrived in 2020, earning in total about 25 percent more than they had the previous year, according to company reports.
That blockbuster growth spurred a need for office space despite the remote-work trend, said Anthony Paolone, co-head of U.S. real estate stock research at J.P. Morgan. “There is a net need for space,” he said.
Technology companies have also begun establishing satellite offices employing hundreds of workers in cities with a high concentration of universities, said Colin Yasukochi, executive director of the Tech Insights Center at CBRE.News Source: The New York Times