New High-Tech Hubs Emerge to Drive Economic Growth, by Jones Lang LaSalle
A recently released study by Jones Lang LaSalle (JLL) titled U.S. High-Technology Office Outlook 2013 highlighted the growing importance and impact of high-tech hubs on local economies and on the commercial real estate sector. The study noted that the high-tech industry comprises only 8.8 percent of total office-using employment in the United States today, but its impact on local commercial real estate markets has been tremendous.
While nearly all other office-using industries have experienced flat or minimal growth, high-tech companies have hired so many employees over the past three years that they now face a highly competitive recruiting environment. For the commercial real estate market, this has resulted in local market recoveries and in many instances, expansion. The growth has occurred so quickly that high-tech companies in many of the country’s core markets now face a dwindling supply of creative office space that is offered at a premium.
Average rental rates in the country’s core high-tech markets at the end of the second quarter of 2013 were 11.6 percent higher than the national average, at $32.69 per square foot compared to $29.29. Additionally, rental rates in core markets increased by 5.1 percent compared to the U.S. growth rate of 3.9 percent, year-over-year, and these markets also recorded a lower vacancy rate, at 14.2 percent compared to the U.S. rate of 16.9 percent.
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