A brand-new report from CBRE revealed that technology companies lost ground to finance and insurance industries in 2022 for the biggest percentage of the top 100 U.S. office leases. Twenty five of the top 100 leases last year were with financial and insurance organizations, which are currently geared to more than quadruple the share they held in 2021. The finance and insurance industry now represents nearly a quarter (7.4 million square feet) of the top 100’s total square footage. New leases made up 60 percent of the total for the financial and insurance sector, largely in the Northeast.
The tech industry’s decline in overall office share is occurring in tandem with the rise of hybrid work and record layoffs following a ten-year surge. Technology companies made only 17 of the top 100 office leases last year, a big drop-off from the 36 made in 2021.
The 100 largest leases made up 15.5 percent of all office space leased in the United States in 2022 (compared to 15.0 percent in 2021), totaling 30.3 million square feet, an increase from 30.7 million square feet. Fifty three percent of the top 100 were new leases, both direct and sublet, down from 61 percent in 2021. Larger occupiers are probably choosing to extend their lease on their current location rather than pay the build-out costs connected with a new lease due to rising interest rates and greater construction costs.
Any industry’s leasing activity will probably slow down temporarily as a result of the bleaker-than-normal economic outlook for this year. Longer term, leasing activity will continue to be driven by the requirement to offer offices that can accommodate future work needs.