Is tech really the demand driver for office space we hoped it would be? Be careful what you wish for. 

The experts tell us things are looking up in many of the sectors that have shown flagging absorption of office space in the past five years. But here’s a recap of our current office market situation:

When you ask everybody where the next wave of office space demand will come from, it seems folks are putting more of their eggs in the tech basket.

Plus: Tomorrow’s workspace: The future is now | Tallest office buildings in the world

The D.C. region, for example, has one of the best ingredients for “thriving” tech companies: a growing population of the most highly educated young people in the country. Moreover, D.C. was recently ranked by as the No. 1 most desirable city for recent college grads, and Forbes just rated D.C. the country’s “coolest” city to live in! Sorry, Austin, Miami, Los Angeles, San Francisco and New York. Yes, the conditions are favorable for markets with great quality-of-life attributes to attract tech tenants. But, take note: It’s really the population of Millennial workers as a whole, rather than just the young tech workers, who drive that Q-O-L demand.

Also: What is the current business climate for Millennials? | Don’t dread Generation Y in the workplace

So, is tech really the sector that can ride in on a white horse and stem the losses we have seen in the current market?

Consider this: Many of the big, lumbering bureaucratic government agencies and old-line law firms are throwing big chunks of space back on the market because they are deliberately shrinking their footprint to a fraction of what it used to be.

The tech companies, on the other hand, are showing up “pre-shrunk,” due to their own reduced RSF (Rentable Square Foot)-per-employee requirements. This built-in reduction is mainly the product of recent trends like coworking and hot desking — and increasingly less the product of teleworking and hoteling, as employees and employers have begun to realize how “anti-collaborative” those latter two trends can be. So, it may take proportionately more tech tenants to fill the same amount of space left behind by the traditional space-gobblers.

A number of tech companies that started in garages have grown up to be highly desirable, creditworthy tenants that have recently made major space commitments in markets like New York and San Francisco. But let’s not forget that many of these tech companies are in their infancy. And, as has already been proven in the D.C. market (think member-based web company occupying a historic bank building next to the White House), their space appetite can be as fickle as their balance sheet.


Yelp Headquarters, San Francisco, Studio O+A (

Consider a few pros and cons of leasing to tech tenants:

Now, consider how your building matches up with the tech tenant’s wish list, which are not just your traditional gym, roof deck and concierge-at-the-front-desk amenities.

Tech tenant wishes can include any of the following:

So, who is poised to benefit from a possible tech office space “boomlet”? And who will likely lose out?


Not winners:

The bottom line

We should be glad to have a business sector like tech helping to drive office space absorption in our regions. But let’s remember a few burst bubbles ago, when tech startups were the root cause. Danger, Will Robinson!

Steve is Senior Vice President of Colliers International in Washington, D.C. Having worked for both owners and occupiers, he writes about regional and national business trends. In his spare time, Steve is an accomplished cook and is also putting the finishing touches on his first movie screenplay. Connect with Steve on LinkedIn.