The new year brought with it the lowest level of unemployment seen in nearly 17 years. Over 200,000 new jobs were added to the market leaving unemployment at an unchanged rate of 4.1%, adding the largest gain in wages since the end of the Great Recession.
But unfortunately these new jobs haven’t helped the office property sector, due to the fact that these jobs were abundant in the construction, food service, healthcare, and manufacturing sector, jobs that don’t necessarily require office space, but the technology sector may be able to change that. The state of office-use employment has been projected to slow down this year with a projected 212,200 jobs, 40% less than what was seen in 2017. Resulting in a forecasted net absorption of 32.1 million square feet of office space, down from the 50.1 million sq ft seen in 2017.
So what does this mean for the office sector? Well, despite the lack of jobs requiring office properties, there is still a modest increase in jobs like technology that thrive on the atmosphere surrounding an office environment for its employees. Studies have shown that technology jobs have been expanding at almost twice the rate of overall job growth, contributing to about 20% of office-leasing activity in the U.S..
In January of 2017, the technology job sector saw an addition of over 3,300 new jobs within 104,000 new software and IT services, which is sure to continue to increase in the years to come with the advances and innovative ways technology is changing the way we live and work.
But which markets are those that show the most promise?
New York is home to some of the largest media and tech companies in the nation. Home to companies like Buzzfeed, Vice Media, Google, Uber, and Twitter. New York continues to grow and with it it brings new and fresh employment opportunities. Much of the New York thrives on this “live-work-play” environment, which appeals to the tech industry and millennials alike.
If you’re interested in learning more about the New York Office market, contact myNOI’s broker in the New York area, George Hubner.
Atlanta was recently ranked No. 5 on a recent tech talent report most likely due to its close proximity to the major tech university, Georgia Tech. Atlanta saw an increase in technology related jobs with over 47% from just last year. Large companies like SalesLoft have recently moved to the Atlanta area with promise to increase hiring over the next five years.
If you’re interested in learning more about the Atlanta Office market, contact myNOI’s preferred broker in the Atlanta area, Rick Ferguson.
Charlotte was recently ranked as the U.S. city with the most millennial due to the abundance in jobs on the market and the affordability of living in North Carolina. In 2015 North Carolina was home to more than 18,000 tech business, growing the tech employment rate in North Carolina to over 17% since 2011. Charlotte shows no sign of stopping, in 2017 a CBRE report stated that Charlotte’s tech talent market had reached 77%, the fasted growth in the 50 markets.
If you’re interested in learning more about the Charlotte Office market, contact myNOI’s preferred broker in the Charlotte area, Clifford Blanquicet at Blanq Real Estate.
For more information on the office markets being impacted by technology read, BisNow’s article “Tech Companies Could Boost Office Rents in These 3 Markets” and Forbes’ article “Heres where Technology Jobs Could Give Office Properties a Boost in 2018.”