High-tech companies account for more than one-fourth of Washington region’s office leasing
Technology firms in the Washington, D.C. metro region leased more than 4.1 million square feet of office space between the first and third quarter of 2014, accounting for 27 percent of the region’s total leasing volume, according to report from CBRE Inc.
The D.C. Tech Pulse: Metro Office Leasing Activity Snapshot research shows that technology leasing is expected to grow in the near term as companies continue to expand their business and real estate footprints.
According to the report, tenants such as Blackboard, Opower and WeddingWire all are 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 square feet of office transactions during the period studied.
The report found that the suburban markets propelled the metro region’s tech leasing activity, as Northern Virginia and suburban Maryland accounted for 70 percent and 19 percent of total tech leases, respectively. Northern Virginia contributes the lion’s share of tech leasing activity in the D.C. metro and accounted for 70 percent of the region’s tech leases in 2014, totaling close to 3 million square feet of office leases. This was propelled by the high-tech services and aerospace/defense sectors.
Technology firms also play a vital role in suburban Maryland’s office leasing activity, accounting for 24 percent of all office space leased between the first and third quarters. High-tech services, engineering and biotech were the three most active tech sectors within that market.
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.