The technology sector is a fast-growing and often high-value industry and its importance to North American cities is growing.
A report from Cushman & Wakefield says that tech is a key driver of the economies and commercial real estate market in Toronto and Vancouver, although the cities do not depend on it.
In contrast, tech is a critical component of the economy and CRE market in several US cities including San Francisco, San Diego, Seattle, Washington DC, Boston, and of course Silicon Valley.
“Tech is no longer limited to just traditional technology companies – media companies, retailers and even law firms are competing for the same spaces and talent as traditional tech companies. While the result can be seen in nationwide trends, we’ve identified key insights that impact companies across every industry,” said Revathi Greenwood, Cushman & Wakefield’s Americas Head of Research.
For tech talent its all about the right location
Technology businesses rely on attracting the right talent. These are often millennials who want to live and work in the most exciting cities.
“Both start-ups and big tech companies have recognized they need a footprint in the central cities to keep attracting millennial workers, and as a result, they are taking large chunks of high-rise buildings and trophy assets in dense urban areas - in addition to keeping their sprawling campuses in the suburbs,” said Ken McCarthy, Cushman & Wakefield’s New York-based Principal Economist.
The tech sector is driving demand in the cities where it is growing – and firms want the best locations.
“With unemployment at 4.0% or lower in each of these markets, tech companies of all sizes are in a war for talent and must do their utmost to hold on to and recruit employees – and that means the best salaries, the best incentives, the best space and the best location. That last point has generally meant an urban or even suburban location that is mixed-use, walkable, bikeable and near mass transit,” added Robert Sammons, Cushman & Wakefield’s Senior Director, Northern California Research.