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News release

BOSTON, MA

Tech Sector Ignites Real Estate Markets

Greater Boston ranks second in high-tech employment, fourth in VC funding in JLL’s High-Technology Office Outlook


BOSTON, Sept. 3, 2014 – Greater Boston ranks second in total high-tech employment, and fourth in high-tech venture capital funding among major U.S. markets. This is according to JLL’s latest High-Technology Office Outlook, a national ranking of top cities for high-tech companies. The ranking shows the impact of the sector on neighborhoods, employment, housing prices and amenities.

“Tech companies are looking for new locations for many reasons, not just for intellectual capital, or venture capital funding but other factors such as standard of living,” said Julia Georgules, co-lead of JLL’s Technology research group.  “In our research, we call this ‘market dynamism.’ We have looked at different lifestyle factors for each of the 34 tech hubs including proximity to transport and walkable amenities.”

JLL’s report, which helps high-tech companies make informed expansion decisions and provides insight for investors, features the top 34 high-tech markets across the country.* To see the market ranking click here.

U.S. hubs serve as economic drivers
While the high-tech industry’s growth is driving employers to find new locations for both talent and real estate, traditional high-tech cities are not exactly struggling. Long-standing hubs continue to function as the industry’s economic engines; in fact, seven traditionally high-tech-centric markets represent more than a fifth (21.7 percent) of the 65.4 million square feet of office space under construction across the country. Together, 14.2 million square feet of office space is under construction in the Boston, the Bay Area, New York’s Midtown South, Seattle, Portland and Austin.

“High-tech employment continues to be a driving force for the Boston economy and real estate market,” said JLL New England Senior Research Analyst, Jordan Yarboro. “Boston ranks second trailing only Silicon Valley in total high-tech employment. In fact, Greater Boston experienced a 4.3 percent growth in high-tech jobs over the year.”

As rents escalate and space becomes scarce in mainstay markets like San Francisco, Silicon Valley and Manhattan, the lure of more affordable prices have high-tech companies seeking talent and real estate elsewhere. The savings potential is huge: downtown Palo Alto, considered the heart of Silicon Valley, has seen such high demand that the office market is just 3.6 percent vacant with average asking rents at $86 per square foot compared to the national average of $30.

This even tops New York City’s Plaza District at $85 per square foot. And rents in smaller markets can be less than half that figure. “High-tech’s growth is not exclusive to traditional high-tech markets anymore,” said Cara Trani, co-lead of JLL’s Technology brokerage group. “High-tech clusters have become much more common as high-tech innovations form the backbone of new product development in all industries.”

“The race is on among cities vying to become ‘the next Silicon Valley.’ As a result, more incentives and tax credits become available to lure high-tech companies into markets that are in need of jobs and economic growth,” Julia concluded.

“Here in Greater Boston, we see growing high-tech clusters in the Suburbs, Cambridge and CBD. Companies both large and small are competing for top talent, and office space is one of the ways they can use to recruit and retain,”
concluded Jordan.

About the High-Technology Office Outlook Report
The report helps high-tech companies make informed expansion decisions and provides insight for investors looking to find the next high-tech hot spot.  This year’s report digs deeper into what makes a market “cool” or “livable” with a new metric included in the index: Market Dynamism. While traditional metrics such as employment, wage growth, intellectual capital, and venture funding are essential to tracking the momentum of a high-tech market, JLL studied the various amenities in the 34 markets in this year’s report to better understand what makes a market tick.

For more news, videos and research resources on JLL, please visit the firm’s U.S. media center webpage. Bookmark it here: http://bit.ly/18P2tkv.

About JLL
JLL (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 fee revenue of $4.0 billion and gross revenue of $4.5 billion, JLL has more than 200 corporate offices, operates in 75 countries and has a global workforce of approximately 53,000.  On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 3.0 billion square feet, or 280.0 million square meters, and completed $99.0 billion in sales, acquisitions and finance transactions in 2013. Its investment management business, LaSalle Investment Management, has $50.0 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit www.jll.com.


*JLL rates each city against six key economic drivers of high-tech growth: high-tech services concentration, job growth, wage growth, share of U.S. venture capital funding, intellectual capital, innovation and market dynamism which includes transportation and lifestyle factors.