Colliers’ 22nd Annual Silicon Valley Trends™ 2021 Event Offers Glimmer of Hope for the Bay Area Real Estate Market, Yet Outlook Remains Hazy
“Colliers is proud to host this year’s event virtually for the first time in 22 years, which enables us to include a wider audience than ever before,” said Reed Payne, Executive Managing Director of Colliers Silicon Valley and host of the event. “The year 2020 was definitely a year of stark contrasts. While several companies announced they were moving out of the Bay Area in the last year, the region still accounted for over 40 percent of venture capital spending last year. That deep technology foundation has enabled Silicon Valley and the Bay Area in general to withstand the most challenging year in recent memory.”
The pandemic was the main driver of real estate trends nationwide. With an unemployment rate of 5.9% at the close of 2020, Silicon Valley proved to be more resilient than other technology markets, rebounding more quickly than San Francisco (6.4%) and Seattle (7.2%). Part of that resilience was attributed to the wealth of established technology companies, including Google, Apple, Facebook and Amazon.
“When it comes to technology companies in today’s environment, no market was completely immune to the pandemic, but size really does matter,” said Lena Tutko, Senior Research Manager at Colliers Silicon Valley. “That’s because the biggest technology companies proved that they are better able to withstand large economic shocks over longer periods of time.”
While transactions were down in the past year due in part to employees working from home, big tech and life sciences companies accounted for the largest Office deals of 2020, with Google leasing nearly 500,000 square feet in early 2020. Life science companies, such as Kodiak and Guardant Health, also recorded some of the largest transactions of the year. Similarly, the Industrial market recorded one of its strongest years on record in 2020, with more than 273 million square feet of positive net absorption—the only sector with positive net absorption last year.
“As we roll out the COVID-19 vaccine nationwide, it’s still unclear how many employers will require employees to return to work, which could affect Office rates, but the fundamentals of the Silicon Valley market remain strong and the market is well positioned to rebound from the pandemic more quickly than other areas, due to its high concentration of large technology companies and a healthy start-up community,” said Tutko. “Silicon Valley remains the epicenter of innovation with a deep talent pool and access to VC funding. From continued demand for office product to the ongoing development of new properties, there’s still much to be hopeful about.”
Please visit http://www.collierssvtrends2021.com for additional event information and research, including the full Colliers 2021 Silicon Valley Trends Market Forecast Report.
About Colliers International Group Inc.
Colliers (NASDAQ, TSX: CIGI) is a leading diversified professional services and investment management company. With operations in 67 countries, our more than 15,000 enterprising professionals work collaboratively to provide expert advice to real estate occupiers, owners and investors. For more than 25 years, our experienced leadership with significant insider ownership has delivered compound annual investment returns of almost 20% for shareholders. With annualized revenues of $3.0 billion ($3.3 billion including affiliates) and $40 billion of assets under management, we maximize the potential of property and accelerate the success of our clients and our people. Learn more at corporate.colliers.com, Twitter @Colliers or LinkedIn.
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