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Jones Lang LaSalle 2013 High Tech market report tracks growth driven by incubators, 24/7 lifestyle; San Diego growth still strong
SAN DIEGO, May 8, 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.
“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.” explains Conan Lee, Senior Vice President with Jones Lang LaSalle. “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.”
San Diego, a well-established technology hub, increasingly appeals to technology firms, thanks in part to its highly educated workforce generated by its collection of renowned local universities. San Diego ranked sixth last year in Richard Florida’s Technology Index, published in Rise of the Creative Class, Revisited. This Index is based upon concentration of high tech companies and two measures of regional innovation, patents per capita and average annual patent growth.
With more than one million square feet of leasing activity in 2012, technology tenants drive a huge portion of office space demand in San Diego. Attracting high-tech firms of every size, from large-cap firms to smaller entrepreneurial companies, is part of San Diego’s appeal, and this diversity has helped continually expand office space demand from tech users over the past decade, even during the recession.
“San Diego continues to be a place where people, particularly young people, want to live; an important consideration for locating a technology company,” said Jay Alexander, Managing Director at Jones Lang LaSalle, who is currently working with the owners of San Diego Tech Center to plan and position their impending expansion of the prestigious San Diego technology office property. “Additionally, we have creative office space opportunities suited to technology firms and a diverse mix of influential technology companies.”
Weapons in the War for TalentThe 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:
New Hot MarketsDifferent cities are responding to the uptick in demand for 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 LaSalleJones 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 and completed $63 billion in sales, acquisitions and finance transactions in 2012. Its investment management business, LaSalle Investment Management, has $47.7 billion of real estate assets under management. For further information, visit www.jll.com.
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Jennifer Whitelaw, TW2 Marketing, Inc.
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