San Diego's high-tech software/service job sector grew 7.6% from Q2 2013 to Q2 2015. Despite out-migration of some mature tech companies, many employees have remained in San Diego, fueling rapid growth at younger innovative tech companies, primarily in Sorrento Mesa.

Technology-based genomics projects by life science companies are increasing significantly expanding the region's need for and pool of tech talent. The local concentration of military operations supports a thriving defense industry and has established San Diego as a center for cyber-security excellence, with major local universities launching cyber security programs to fuel the growing demand for such skills.

“It is great to see the velocity of growth in the local tech sector companies,” said Andrew Ewald, vice president and tech and media expert for CBRE in San Diego. “Typically, our growth is from local companies that are expanding organically in San Diego, but recently we have also seen a tremendous amount of new companies that have relocated or expanded their business operations to the Sorrento Mesa area. The epicenter of the tech market is receiving global recognition, which is attracting a number of new companies to this market. From a real estate perspective, this growth is driving demand for quality class A buildings that are rich with amenities, as well as unique, older product that is being converted into more creative and collaborative workplaces. As Sorrento Mesa continues to see growth in its tech community, the war for talent will continue to drive decision makers to demand quality building opportunities to recruit and retain. I expect to see this continued growth in this tech sector over the next 24 months.”

Source: U.S. Bureau of Labor Statistics, Statistics Canada and CBRE Research, July 2015.

The high-tech software/services industry has created 730,000 new jobs since 2009 and was the leading driver of U.S. office market demand, accounting for 20% of major leasing activity, through Q2 2015. In many leading tech markets, the sector is even more dominant: in Silicon Valley, Austin, San Francisco and Seattle, high-tech companies accounted for 88%, 63%, 62% and 60 percent of major leasing activity through Q2 2015, respectively.

“The high-tech industry is directly supported by consumer demand and a growing number of high-tech integrated businesses, which should keep the industry strong in the years ahead and provide further support for office markets in the Tech-Thirty,” said Colin Yasukochi, director of research and analysis for CBRE. “Commercial real estate investors must be mindful and have realistic expectations about this historically volatile industry underpinning the health of many 'Tech-Thirty' office markets.”