San Francisco Bay Area and Seattle standout for quality, while
best-value markets include Toronto, Vancouver, Indianapolis, Pittsburgh
LOS ANGELES--(BUSINESS WIRE)--Jul. 18, 2017--
Strong demand for skills, such as software development, hardware
engineering and information security, coupled with a tight labor supply,
is driving companies to locate in markets with the largest
concentrations of high-quality talent, according to CBRE’s
fifth annual Scoring
Tech Talent Report. And while value is a key driver when it
comes to choosing an office location, companies are increasingly willing
to pay a premium to access the highest quality tech talent.
Overall cost variances from market to market are striking: Taking both
talent and real estate costs into consideration, the “typical”
U.S.-based, 500-person tech company needing 75,000 sq. ft. of office
space can expect its total annual cost to range from US$24 million in
Vancouver, the least expensive of the 50 markets included in the CBRE
report, to US$57 million in the San Francisco Bay Area, the most
According to CBRE’s analysis, which can be viewed in detail through the
Talent Analyzer, the best-value markets with the highest
quality of talent are Toronto and Vancouver (due in part to the strong
U.S. dollar) followed by Indianapolis, Pittsburgh and Detroit.
“Since the cost of talent is the largest expense for most firms, the
quality of that tech talent is becoming one of their most important
considerations. The skills of the available labor pool do not appear to
align with available jobs, causing a structural impediment to growth for
companies across North America,” said Colin
Yasukochi, director of research and analysis for CBRE in the San
Francisco Bay Area.
Tech Talent Scorecard
Atlanta and Toronto are the big stories on this year’s Tech Talent
Scorecard. Atlanta entered the top five for the first time along with
traditional stalwarts like San Francisco Bay Area, Seattle, New York and
Washington, D.C. Atlanta bumped Austin out of the top five, which fell
back to number 8. Atlanta is one of the few large markets that
maintained its fast pace of tech talent growth and has an accelerated
forecast for future tech job creation, which elevated its position in
Meanwhile, Toronto jumped a full six spots to number 6, from last year’s
number 12. The elevated ranking was due to its talent employment base
growing by the highest number of workers.
The rankings for the Tech Talent Scorecard are determined based on 13
unique metrics including tech talent supply, growth, concentration,
cost, completed tech degrees, industry outlook for job growth, and
market outlook for both office and apartment rent cost growth.
Top Momentum Markets
Tech job growth gained momentum in 28 of the 50 markets. This means job
creation grew faster in the past two years (2015-2016) compared with the
prior two-year period (2013-2014). The number of markets experiencing
faster growth almost tripled from 10 markets in last year’s Scoring Tech
The top 10 momentum markets included Madison, WI; Ft. Lauderdale, FL;
Salt Lake City, UT; Miami, FL; Kansas City, MO; Omaha, NE; Columbus OH;
Pittsburgh, PA; Orange County, CA and Sacramento, CA.
Commercial Real Estate Market Impact
The high-tech industry’s share of major leasing activity nationwide
increased to 19 percent in 2017 from 11 percent in 2011—the largest
single share of any industry. Accordingly, office rents are up in almost
every market in the top 50 and vacancy has declined, with the biggest
impact in the most tech-concentrated sub-markets.
Rent growth is most prominent in the large tech markets, with office
rents in the San Francisco Bay Area two-thirds higher than five years
ago. But the decrease in vacancy rates is present across both large and
small tech markets. Vacancy rates in the San Francisco Bay Area and New
York are the lowest of the top 50 tech talent markets, and some small
markets like Madison and Nashville are not far behind.
To view the full report, please click here.
To view individual markets statistics and rankings, including rankings
on the Scorecard, click to access the Tech
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company
headquartered in Los Angeles, is the world’s largest commercial real
estate services and investment firm (based on 2016 revenue). The company
has more than 75,000 employees (excluding affiliates), and serves real
estate investors and occupiers through approximately 450 offices
(excluding affiliates) worldwide. CBRE offers a broad range of
integrated services, including facilities, transaction and project
management; property management; investment management; appraisal and
valuation; property leasing; strategic consulting; property sales;
mortgage services and development services. Please visit our website at www.cbre.com.
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Source: CBRE Group, Inc.
CBRE Group, Inc.