Nearly half of all Boston office leases in 2018 involved a technology company taking space, according to a new report from brokerage Cushman & Wakefield. Such a share highlights just how big an industry technology is in the city and how that presence ripples into the residential market too.
New leases by tech companies accounted for 47.7 percent of leasing activity in Boston proper. That was one of the highest shares in the nation in 2018, according to Cushman & Wakefield. Only Silicon Valley/San Jose, the San Francisco Bay Area, and Salt Lake City had greater shares (see chart farther down).
The office leasing figure is important because it underscores just how prominent the technology industry in its myriad forms, including biotechnology or life sciences, is in Boston. Without such prominence, it’s safe to say that housing costs would not be as high.
Why? Because one of the reasons that prices and rents in Boston and its surrounding region are so high compared with much of the rest of the U.S. is that there are plenty of tenants and buyers willing and able to pay such sums. And a lot of those tenants and buyers come from the tech sector.
Remember the debate over the Amazon HQ? Some worried that if the e-commerce behemoth picked Boston for its second headquarters, its newly arrived employees would gobble up that much more of the city’s already relatively scarce housing supply and further drive up prices.
Tech’s prominence in Boston is only expected to grow too. An annual survey of the industry by management consultancy KPMG released in February found that Boston is seen as the ninth likeliest city globally to become the “leading technology innovation hub outside of Silicon Valley over the next four years.”
As for the office leasing last year, Cushman & Wakefield credited rising venture capital investment and individual areas’ own local tech climate for the higher-than-usual shares. Nationally, the industry accounted for about 30 percent of new office leases last year.