Washington, D.C. – December 8, 2014 – Technology firms in the D.C. metro region leased over 4.1 million sq. ft. of office space between Q1 and Q3 2014, accounting for 27% of the region’s total leasing volume, according to CBRE, Inc.’s D.C. Tech Pulse: Metro Office Leasing Activity Snapshot research report.
Tech leasing is expected to grow in the near term as firms continue to expand both their business and real estate footprint. Tenants such as Blackboard, Opower and WeddingWire are all seeking potential office space expansions in 2015 and beyond. The D.C. metro region distinguishes itself from other tech markets by its high concentration of tech firms that support the federal government. Government contractors drove the bulk of tech leasing activity and were responsible for 2.8 million sq. ft. of office transactions during the time period.
The report found that the suburban markets propelled the metro region’s tech leasing activity as Northern Virginia and Suburban Maryland accounted for 70% and 19% of total tech leases, respectively. Northern Virginia contributed the lion’s share of tech leasing activity in the D.C. metro and accounted for 70% of the region’s tech leases in 2014, totaling close to 3 million sq. ft. of office leases. This was propelled by the high-tech services and aerospace/defense sectors.
Technology firms play a vital role in Suburban Maryland’s office leasing activity, accounting for 24% of all office space leased between Q1 and Q3 2014. High-tech services, engineering and biotech were the three most active tech sectors within the market. Over 70% of the D.C. region’s biotech leases in 2014 took place in Suburban Maryland, primarily outside the Beltway.
Meanwhile, tech firms contributed over 50 leases in the District between Q1 and Q3 2014, totaling 451,000 sq. ft. of office space. While relatively small in size, this points to a growing ecosystem of early-stage companies poised for continued expansion, with startups flocking to incubators and co-working space. WeWork opened three locations in the District in 2014, underscoring its recognition of D.C.’s flourishing tech scene and growth potential.
Other highlights of the report include:
The D.C. metro region has become one of the nation’s most active markets for venture capital investment. Maryland, Virginia and the District of Columbia raked in more than $1.5 billion in total venture funding in 2013, more than doubling the amount invested in 2012.
State and local governments continue to offer a variety of incentives aimed to boost capital investment financing and attract more tech firms to the region. These incentives include tax credits and exemptions, grant and loan programs, as well as expanded tech zones.
Tech-centric corporations comprised nine out of 2013’s top 20 spenders in terms of lobbying efforts. With one party now controlling both chambers of Congress, legislative action is expected to increase with a corresponding rise in lobbying activities. Companies, including tech firms, will likely expand their government affairs’ presence in the District.
Click here to view the report
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2013 revenue). The Company has approximately 44,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through approximately 350 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.