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Written by: Erik Hayden | Urban Catalyst
“The office is dead.” “No one is returning.” “Everyone will work remotely from now on.”
We’ve heard a lot of this kind of talk since the pandemic hit, but it’s becoming clearer every day that this simply isn’t true. At least not in Silicon Valley. Don’t just take our word for it, let’s see what the industry reports are saying.
“Silicon Valley tech firms have buoyed an office market rebound in the Bay Area and nationwide, a trend that points to a commercial real estate recovery from coronavirus-linked maladies, a new report shows,” the Mercury News reported in an article titled, “Silicon Valley tech companies lead office sector rebound: CBRE report.”
Researchers found that office leasing activity in Silicon Valley and San Francisco “has soared during the first nine months of 2021 compared with the same period in 2020 and is rising far more quickly than office leasing nationwide,” according to the CBRE report.
The report also found that office leasing activity in Silicon Valley (defined as Santa Clara and San Mateo counties) from January through September 2021 was 44 percent higher compared to the same period a year earlier. Nationally, office leasing was up 7.5 percent over those same time frames. Why the difference? Because tech companies are hiring at a faster rate than those in the non-tech sectors. “National tech employment is now above pre-pandemic levels.”
This upward trend in office leasing was also noted in a national survey by Visual Lease, which develops lease optimization software. The company surveyed 400 senior accounting and finance professionals and commercial real estate executives--half representing the perspective of tenants, and half representing the perspective of landlords.
“Sixty-five percent of landlords expect tenants will add space to their real estate portfolios in 2022,” the survey indicated. “Similarly, 70 percent of tenants plan to expand their commercial real estate footprint in the year ahead.”
So what does all this mean? Simply put, the office market is stronger than ever and people are coming back to the office.
Related: Building a City Through Revitalization with Erik Hayden