The Bay Area led the nation in tech leases and had 13 of the top 100 U.S. office leases in 2022, according to a new report by CBRE. The region’s nine tech leases, totaling 3.3 million square feet, accounted for more than half of the U.S. tech total.
Silicon Valley accounted for six of the 100 largest office leases in 2022, totaling 2.2 million square feet. More than 1.6 million square feet were new leases in the technology sector. San Francisco had three transactions, totaling 1.2 million square feet; nearly 600,000 of those square feet were new leases by tech and retail trade companies.
The San Francisco Peninsula had three leases in the top 100, totaling 1.1 million square feet, signed by companies in the tech sector. There was one lease in the East Bay signed by an energy company.
The CBRE report does not mention specific leases and which ones were the largest nationally or in the Bay Area. An analysis of quarterly office reports by Colliers indicates that the largest new lease in the Bay Area was by a TikTok parent company subleasing 650,000 square feet of office space from Verizon in San Jose.
While tech leases were down nationally from 36 in 2021 to 17 last year, the number rose in the Bay Area from eight in 2021 to nine last year. Tech leases were second nationally and only trailed finance and insurance companies in the number of top 100 office leases. Finance accounted for 25 percent of overall leases, double the total from 2021, while tech leases fell by over half.
The bulk of the tech leases happened in the first half of last year as tech companies started pulling back their expansion plans and payrolls in the second half as they adapted to the post pandemic economy.
“The tech industry remains the dominant sector making large office space commitments in the Bay Area even though their leasing activity slowed in the second half of 2022,” Colin Yasukochi from CBRE said. “Uncertainty about remote and hybrid work and the macroeconomic environment caused the tech industry, and others, to adjust their real estate portfolios. We have experienced similar cycles in the past and the tech industry adjusts quickly and positions itself for the next growth cycle. Because of this, I am optimistic about the tech industry in the long run.”