A new report by Cushman & Wakefield delves into the fast growth of cybercrime, and the corresponding capital opportunity for cybersecurity, particularly in the realm of commercial real estate. Key tech sectors such as San Francisco Bay Area, Washington, DC, NYC, New York and Austin, Texas might see booms in both attacks and businesses offering solutions.
Every day, the world produces 2.5 quintillion bytes of data, with 90% of this data generated in the last two years. Life is moving online more, meaning that cybersecurity is a pressing concern in day to day life. This explains the finding in the report Cybersecurity: A Major Capital Opportunity, which found that the number of cybersecurity firms is increasing year-to-year, with San Francisco a leader in the number of firms.
Over $5.6 billion in venture capital and private global equity funding went into almost 200 cybersecurity firms in 2017, and this was an increase of $1 billion from 2016. Due to moments such as KKR’s buyout of Optiv, Denver led the Bay Area with over $1 billion invested in both markets.
The total spend on cybersecurity has risen steadily since 2014, and is projected to hit $120B by 2021. As for growth in terms of employment, there are currently 280,000 unfilled openings in places with robust tech and finance sectors such as Texas, Florida and New York.
Another measurable indication of the growing demand for cybersecurity firms is the massive increase in leasing to said companies across the U.S., with 1.4 million square feet signed, of which 1.2 million is new.
“Of the 1.2 million square feet of new space taken nationally, more than 800,000 square feet of this was throughout the San Francisco Bay Area in neighborhoods such as the Financial District and SoMa in San Francisco, Santa Clara, Redwood City, and both the downtown and near-airport neighborhoods in San Jose,” Cushman & Wakefield research director, Kevin Imboden said.
Silicon Valley is known for holding a soli cybersecurity presence. According to John Redeker, Leader of Cushman & Wakefield’s Cybersecurity Advisory Group, every tech-conscious market can benefit from the cybersecurity boom.
“Cybersecurity companies in these markets are prioritizing lease flexibility and scalability as they occupy more space to accommodate their growth,” Mr. Redeker said. “As a result, developing and employing an effective real estate strategy has become vital to the success of new leases across different markets.”
Network and administration design and development of cybersecurity systems.