Last week I spoke at a NAIOP event titled Boston: Hub of the Future? The focus on technology and real estate is not a new one. In fact, parts of the topic are very reminiscent of the technology boom of the late 1990’s. There are some clear differences too. My talk focused on three primary ways that I see technology impacting the commercial real estate landscape.
The first is through space demand. Tech companies are the fastest growing members of the office tenant base as we analyze demand across the country. As a result, the top tech markets like Silicon Valley, San Francisco, Boston, Austin, and Seattle are among those leading the office recovery.
It’s the tech submarkets within those metros that are really hot. Rental rates last year grew 25% in Palo Alto, 35% in south of San Fran, and 20% right here in Cambridge. The tech services sector and specifically mobile, social media, search, cloud, and gaming that are the most active. They are recruiting young creative tech talent, and have to be in the urban tech hot spots with “creative” space to find and keep them.
The second way technology is impacting real estate is through our business. I see it plainly in my research world, where real time interactive digital content is rapidly replacing traditional quarterly PDF reports. Blogs like this one are the norm. Social media and mobile apps are changing how we connect with and engage clients, prospects, and our own people. There are many other examples, but one thing for sure is that as more millennials enter our industry, technology will play a larger role in how we work.