Austin High-Tech Sector Accounts For 25% Of Office Jobs: Report

AUSTIN, TEXAS — The ongoing development of Austin's sizable high-tech sector is a much-ballyhooed dynamic often touted by local politicians and civic boosters. A new report confirms the industry's brisk growth, noting that related jobs now comprise 25 percent of the city's office jobs.

According to CBRE’s 2018 Tech 30 report, Austin continues to rank highly in the U.S. for tech industry market growth. Most notably, high-tech software and services jobs now make up approximately a quarter of all office-using jobs, up from just 16 percent in 2011. researchers found.

“What this research shows is that tech is driving a tight, competitive office market here in Austin,” Troy Holme, executive vice president at CBRE in Austin, said. “Large tech firms now make up the top users in Austin’s CBD, and they are still expanding. We expect the percentage of office-using jobs from the tech sector to continue to rise.”

The upshot: Office-using jobs from the tech industry correlates to Austin’s ranking as No. 6 among the Tech-30 markets for overall office net absorption growth, researchers learned.

“One of the unique aspects of the Austin market is that the office sector development cycle this time around has been very controlled,” Holme added. “Despite high demand, we are not seeing much office space being built on spec. Instead, office developments often have a pre-leasing commitment (20-50 percent leased) before they break ground and are at stability (90-100 percent leased) when they deliver to the market. In this environment, as landlords continue to do well, they keep pushing the envelope of higher rents and fewer concessions.”

In a related finding, the study notes that Austin is also considered a growth leader market in the U.S. due to its overall tight office market and high-potential for job strength in the tech industry, according to analysts' findings.

For the full report, click here.

Impact of tech job growth on office markets

The influence of tech job creation on office market growth is pervasive across the U.S. and Canada, with eight of the Tech-30 markets posting rent growth of 10 percent or more between the second quarter of 2016 and the same period this year. Office rents also increased in 26 of the 30 primary tech submarkets over the same period, analysts noted.

“As space availability in top tech sub-markets continues to tighten, we expect large tech companies to continue to expand outside their headquarters markets—including further into secondary and even tertiary markets," Colin Yasukochi, director of research and analysis for CBRE in the San Francisco Bay area, noted. "Large tech company expansion into smaller markets will help foster innovation clusters, further boosting job creation and creating additional office demand.”

About CBRE Group, Inc.

CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2017 revenue). The company has more than 80,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. For more information, visit www.cbre.com.

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