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News release

SAN FRANCISCO, CA

Technology War for Talent Reaches Smaller Cities

Jones Lang LaSalle 2013 High Tech market report tracks growth driven by incubators, 24/7 lifestyle


SAN FRANCISCO, April 16, 2013 — The war for talent in the technology sector has taken to the road, moving beyond traditional hubs like Silicon Valley and New York and into markets not historically known for concentrations of high technology talent but offering the right mix of recent graduates and an urban 24/7 lifestyle, according to Jones Lang LaSalle’s  (JLL) High Tech Office report. Minneapolis, Las Vegas, and Phoenix are among the new frontiers attracting technology heavyweights and start-ups alike.

“Silicon Valley and other traditional tech hubs are still at the forefront for high-tech employment growth, but the battle for talent is creating new technology-friendly cities,” explains Conan Lee, Senior Vice President with JLL. “Smaller cities are investing in their urban neighborhoods to create 24/7 destinations to mimic the feel of denser metropolitan areas. These are the new frontiers, attracting new pools of talent.”

Weapons in the War for Talent
The report, which tracks the use of real estate by high technology firms in the U.S., found that the following real estate trends serve as weapons in the war for high tech talent:

  • Urban lifestyle and 24/7 amenities: Paying the premium for hot urban neighborhoods, technology companies are locating in cities where young professionals can live, work and play. In fact, some companies are sacrificing cheaper real estate for ‘hip’ high-tech hubs. Landlords have long marketed such locations as “tech-centric,” but now they are becoming less flexible on terms as technology companies compete for the best locations.
  • Creative space: Tech companies of all sizes are using creative space as a tool to attract top talent. Connectivity, mobility and convenience are the key features used in creative space design. Demand is intense for renovated warehouses and brick-and-beam buildings, often paired with other perks like shuttle busses to public transportation and free meals. Space is being used to drive corporate culture, in a variety of ways aligned with CEO vision.
  • Incubators that nurture start-ups: Big companies aren’t the only ones seeking collaborative environments. Entrepreneurs that once would have worked from a garage or dining room table are now renting desks in incubator environments, using the camaraderie of fellow entrepreneurs to drive innovation and crowd-source problem-solving.  Incubators and accelerators themselves are leasing significant amounts of tech-friendly space.

Hot Markets
Different cities are responding to the uptick in demand from high tech real estate in different ways, as demonstrated on the following map summarizing market highlights from across the U.S.  For instance, here are some reasons why the following cities are burgeoning tech hubs:

Minneapolis: High-tech job growth has outpaced office job growth since 2009, as technology companies search outside traditional markets for new talent pools.  Kroll Ontrack’s lease of 195,000 square feet is ranked as one of the top 10 technology real estate transactions nationwide of 2012, and Oracle is leasing 140,000 square feet in the city.
Las Vegas: While the local tech sector may be long on ideas and short on venture capital dollars, the momentum created by the new Zappos headquarters under construction in the Downtown submarket is contagious, and includes a technology incubator and conscious urban planning expected to drive rapid growth of this emerging cluster.
Phoenix: Also a beneficiary of technology firms seeking new talent pools, Phoenix is taking strides to compete on the national tech stage, showing early signs of a new cluster emerging in the desert.

Figure One: Market Highlights Growth by the Numbers


About Jones Lang LaSalle
Jones Lang LaSalle (NYSE:JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual revenue of $3.9 billion, Jones Lang LaSalle operates in 70 countries from more than 1,000 locations worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services to a property portfolio of 2.6 billion square feet. Its investment management business, LaSalle Investment Management, has $47.0 billion of real estate assets under management. For further information, visit www.jll.com

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