When F5 Networks signed a lease last spring in the Mark, a new 48-floor office and hotel edifice in downtown Seattle, the deal concluded a hunt for new headquarters that would provide the company with room to grow and its employees with nearby transit, restaurants and other amenities.
Even with more than six million square feet of office space under construction in the Seattle metropolitan area, space was vanishing, said Jay Phillips, director of global real estate and operations for F5 Networks, which delivers application cloud and security solutions.
Similar space races are happening in tech-oriented markets around the country, and like the decision of F5 Networks to move into a top tier, or “trophy,” building, more maturing tech companies are a main driver of occupancy in newer high-end offices. That’s a departure from the days when tech start-ups preferred old warehouses and office buildings converted into wide-open loft offices. Full of exposed brick, wooden beams, high ceilings and concrete floors, the funky work spaces gave birth to tech enclaves in places like San Francisco’s South of Market neighborhood and Manhattan’s Flatiron district.
Tenants in the technology, creative and media industries leased more than 8.5 million square feet in trophy buildings in the United States over the 12 months that ended in the first quarter of 2017, according to JLL. That amounted to 22 percent of all trophy space leased over the period, a year-over-year increase of seven percentage points. It was also second only to the banking and finance sector in total square feet leased.
Proximity to transit, shops and restaurants is critical, but so are amenities within buildings, including coffee stands, gyms, lounges and, of course, the proverbial Ping-Pong table. Tenants are more likely to find all of those features in new or retrofitted office buildings, said Stuart Williams, a managing director with JLL in Seattle.