Following a series of downsizings in the tech industry, tech has been dethroned as the leader in leasing large offices.
According to a new report from CBRE, a commercial real estate firm, the finance and insurance industry surpassed technology last year to take the top spot after recording a quarter of the largest 100 leases by square footage in the United States.
The largest 100 leases accounted for 15.5% of total U.S. office leasing last year vs. 15.0% in 2021, totaling 30.3 million sq. ft. in 2022 vs. 30.7 million sq. ft. in 2021. New direct and sublet leases contributed to 53% of the top 100, down from 61% in 2021. Higher interest rates and higher building costs influenced bigger occupiers to renew their lease instead of accruing the build-out expenses that come with a new lease.
Last year, finance and insurance companies accounted for 25 of the top 100 leases, more than doubling their share in 2021 and accounting for nearly one-quarter (7.4 million square feet) of the top 100’s total square footage. Sixty percent of new leases in the finance and insurance sector were in the Northeast. Due to the impact of hybrid work on the sector, technology firms accounted for 17 of the top 100 last year, down from 36 in 2021.
Among the top 100 markets, Manhattan, Silicon Valley, and Dallas/Fort Worth were the top three for new leasing activity, driven primarily by the finance and insurance and technology sectors. The three markets were responsible for 36% of total new leasing activity.
The sources for this piece include an article in Axios.
