King Of The Office: Finance And Insurance Replace Big Tech For Largest Share Of Office Leases

As Big Tech comes off its worst year since the financial crisis of 2008, the industry

is reining in its extravagant spending — including for luxurious office space.

The finance and insurance industries replaced the tech industry in 2022 for the largest share of the top 100 office leases in the U.S., according to a new report from commercial real estate services and investment firm CBRE.

Finance and insurance companies claimed 25 of the largest 100 office leases by square footage, up from 12 in 2021. Tech companies accounted for 17 of the largest leases, a decline of more than half from the 36 the industry notched in 2021. Tech led overall U.S. office leasing activity from 2013 until last year.

Other industries that expanded their share of the largest 100 leases last year include business and professional services with eight leases, creative industries with five, retail trade with seven, energy with five and manufacturing and transportation with five.

“The inclusion of a wide range of industries among the largest 100 office leases shows that the office remains a cornerstone of hybrid work for many professions,” said Whitley Collins, CBRE’s global president of Occupier Advisory & Transaction Services. “The probability of a recession will slow leasing in the short term. But, in the longer term, the need to provide offices that support the future of work will continue to drive leasing activity.”

The 100 largest leases totaled 30.3 million square feet in 2022 versus 30.7 million square feet in 2021, accounting for 15.5% of total U.S. office leasing last year versus 15% in 2021.

The Northeast had 31% of the largest leases, followed by the Pacific states with 21%.

On the metro level, the markets with the largest number of large office leases in 2022 were:

• Manhattan, New York: 18 leases totaling 5.5 million square feet
• Northern Virginia: six leases totaling 2.5 million square feet
• Silicon Valley, California: six leases totaling 2.2 million square feet
• Dallas/Fort Worth: five leases totaling 1.9 million square feet
• Chicago: eight leases totaling 1.8 million square feet
• Washington, D.C.: four leases totaling 1.6 million square feet
• Houston: six leases totaling 1.5 million square feet
• Atlanta: six leases totaling 1.4 million square feet
• Los Angeles: five leases totaling 1.2 million square feet
• Boston: four leases totaling 1.2 million square feet

“Firms that are confident of their business model and understand how to balance in-person and remote work knew that 2022 presented a market opportunity for aggressive transactions in office space,” said Mary Ann Tighe, CEO of CBRE New York Tri-State. “In the midst of uncertainty, those firms saw opportunity and seized it.”

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