Bay Area Tech Giants Expand Across US
- Oct 04, 2019
While the San Francisco Bay Area has long been synonymous with the technology industry, the region is hardly the only tech hub in the U.S. According to Cushman & Wakefield’s new report, The Great Tech Migration, tech companies based in the Bay Area have expanded their footprint across the U.S., establishing a major presence in cities in the South, Midwest and along the East Coast.
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Per the report, 58 of the 89 Bay Area-based technology and life sciences companies with headquarters exceeding 100,000 square feet have committed to a total of 30.4 million square feet of office space in other cities across the U.S. since January 2010. Austin attracted 6.1 million square feet of that space, more so than tech haven Seattle, which saw Bay Area tech companies claim 5.1 million square feet. Notable tech deals for office space in Austin over the last 12 months include Apple’s announcement of a planned $1 billion investment in the development of a new 133-acre campus.
“Austin has a long history with the tech industry and that has only grown over the past decade,” Robert Sammons, senior director in research with Cushman & Wakefield, told Commercial Property Executive. “There was a built-in talent pool thanks to earlier tech companies incubating and growing in the market so the players that have come along later have taken advantage of that. Having a major research institution like the University of Texas with another ready talent pool has been incredibly beneficial.” In addition to the significant high-tech workforce, the low-cost, low-tax environment also serve as a magnet, as does the substantial availability of developable land for further expansion.
Bay Area tech leaders have also established a notable presence in New York, taking 5 million square feet of office space in the city since 2010. New York is home to some 442,000 tech occupation workers, more than twice the amount available in Seattle. Southern California followed Austin, Seattle and New York, with 3.1 million square feet of office commitments from leading Bay Area tech companies, followed by Chicago with 2.5 million square feet. “While there has been much talk surrounding many of the markets making the list, the most intriguing was Chicago,” Sammons said. “Recently, there has been much interest in that market from the big tech players, in particular with several taking down big blocks of space. It’s certainly been driven by the significant talent pool there, along with several research institutions and it certainly doesn’t hurt that it is a lower cost alternative.”
Bay area still reigns supreme
While the U.S. tech industry has certainly been in national expansion mode, its center remains in the Bay Area. The region has recorded 55 million square feet in tech and life sciences leases, acquisitions and commitments since January 2010. Earlier this year, Facebook preleased Burlingame Point, an approximately 800,000-square-foot office campus project in Burlingame, for its virtual reality firm Oculus. Pinterest inked a prelease for 490,000 square feet at 88 Bluxome St. in San Francisco’s SoMa neighborhood. All told, tech/life sciences tenancy currently accounts for more than 103 million square feet of office and R&D space in the Bay Area. “Tech’s ‘core’ remains firmly entrenched in this region, whether in Silicon Valley or in San Francisco,” added Sammons. “Again, this expansion has so much to do with the dense talent pool, the research institutions and the venture capitalists in our ‘backyard’ making it much easier to develop a start-up.”