OK, I’m sorry.  But I did warn you, didn’t I?  (And lets be clear. No, I do not have Dionne Warwick on my ipad).

My driver Jose (no joke) certainly knows his way to San Jose (although it must be said that he has a GPS device as a discreet but clear back-up).  He guides me down Highway 101 into the very heart of the US, neigh global, tech sector.  So often imitated but rarely rivalled, this stretch of highway and its associated settlements, is home to the most powerful tech companies in the world.

And from a distance they look in rude health.  There is no longer any real or sustained evidence of office vacancy and to the contrary there are numerous billboards proudly announced the new HQ of perhaps the next big names in technology.  The line in the song is ‘Do you know the way to San Jose? They’ve got a lot of space.  There’ll be a place where I can stay’.  I’m not convinced that’s altogether accurate for office occupiers as the growth spurt in tech gains increasing momentum.

Relative to the rest of the US, this market is on fire, and it shows.  In fact, GDP growth in the Valley was 13% in 2011 – that’s emerging market performance.  Yet this market emerged a long time ago (1971 was in fact when the term Silicon Valley was first coined) and although its fortunes waned when the tech bubble burst, a new wave of innovation and an insatiable consumer and corporate appetite for the fruits of that innovation, has brought renewed optimism that a new growth spurt is upon us.  It is an optimism that is well founded. More than 75% of occupier demand is being generated by tech firms involved in search, social media, mobile and cloud computing whilst financial services, legal and the public sector are still contracting their footprints.

Accordingly, both Silicon Valley and its adjacent City, San Francisco, are at the very head of the Q4 US Office Property Clock.

But of course for the technology companies themselves – as occupiers of real estate – this generates an environ of rising real estate and operational costs and the pressures of accommodating growth.  Rental growth in tech heavy submarkets (Silicon Valley and San Francisco) has skyrocketed by 30-40% in 2011 as firms compete for limited prime space opportunities.  In speaking to the real estate teams of two major technology firms it is clearly a pressure that is front and centre in their thinking.

Given the growth trajectory of tech, there is a real concern about how to accommodate growth – not just here in the valley but also across global markets that also have a paucity of good quality supply.  A move to secondary space and a commitment to retrofit the space is one strategy that is gaining ground given that the supply of secondary stock across markets is more plentiful and the costs attractive.

The tech companies are also way ahead on the workplace productivity agenda item too.  Perhaps you would expect no less of companies responsible for the production of key productivity enablers.  Nonetheless, it is fascinating to see how these companies are embracing technology to work the space harder in terms of occupational densities; create more flexible but fully connected workspaces that promote collaboration and creativity; and indeed using technology to make the experience of the office users more efficient.  Its impressive and it enables a more efficient approach to accommodating growth.

My final observation from a day of fascinating meetings is that whilst these technology occupiers are in many ways at the vanguard of best practice – they are not slowing in their resolve to think and act differently.   Currently occupying their minds is the issue of worker mobility – both the classic chicken and egg scenario of taking the work to workers or seeing the workers go to the work but also how to use technology to create truly mobile but totally connected workforces.  More on that next time.