Cybersecurity Firms Leased More Space In San Francisco Bay Area Than Any Other Region
The San Francisco Bay Area was a top market for cybersecurity lease activity and venture capital funding in 2017, according to Cushman & Wakefield’s Cybersecurity: A Major Capital Opportunity report.
Bay Area cybersecurity firms signed over 830K SF in leases, and more than $1.6B in VC funding went to cybersecurity firms in the Bay Area. Over 13,000 job openings were listed in the region as well.
Every tech-centric market in the U.S. should benefit from cybersecurity’s growth, Cushman & Wakefield Cybersecurity Advisory Group Leader John Redeker said. In 2017, over $5.6B in venture capital and private global equity funding went to nearly 200 cybersecurity firms.
Much of this demand centers around network maintenance and administration and the design and development of cybersecurity systems, the report said.
Denver benefited from KKR’s buyout of Optiv and had an inflow of VC funding of over $1.9B, more than any other region. Other markets receiving over $100M in funding included New York, Boston and Washington, D.C.
Cybersecurity firms tend to prefer being near key clients in the software, financial and defense industries, the report said.
“Cybersecurity companies in these markets are prioritizing lease flexibility and scalability as they occupy more space to accommodate their growth,” Redeker said in a statement.
The Bay Area represented about 70% of the 1.2M SF leased by cybersecurity firms nationally. Leasing activity occurred in the Financial District and South of Market in San Francisco and in Santa Clara and Redwood City.
Okta signed a 10-year, 207K SF lease at Kilroy’s 100 First St. in San Francisco and plans to occupy the space mid-2018. Gigamon renewed its lease and expanded its Santa Clara office presence to over 151K SF. Sonicwall leased 75K SF in Milpitas. Cybersecurity firms typically sign five- to seven-year leases.
Duo Security signed a 22,800 SF lease, which will begin this year, at 2 West Fifth St. in San Mateo, becoming the first cybersecurity firm to lease in the building, according to owner Michael D'Ambra. Cushman & Wakefield Executive Director Marc Pope and Director Shannon Chircop represented the landlord.
Other cybersecurity firms leasing in the Bay Area in recent years include AlienVault and Fortscale Security in San Mateo, Sophos in San Mateo and Santa Clara, Anomali in Redwood City, Symantec in Mountain View, VMware in Palo Alto and Bugcrowd in San Francisco.
