H-1B visa program deeply impacts talent and real estate demand outside the DC Beltway

The federal H-1B visa program has been a major component of both tech and life science growth around the U.S. and regionally this cycle

May 29, 2019
  • The federal H-1B visa program, which provides temporary visas to foreign-born, college-educated workers in STEM fields, has been a major component of both tech and life science growth around the U.S. and regionally this cycle, as domestic and regional talent shortages have greatly escalated. Regionally, Northern VA is the tech hub of Metro DC, home to 60% of our tech talent and Suburban MD serves as our region’s life science hub, home to 99% of our life science talent. Interestingly, in a trend that counters urbanization globally, both regional drivers and clusters largely reside in the suburbs outside the Beltway, which is supported by an analysis of employment visas above. 
  • Across Metro DC, six out of every 10 H-1B visas awarded over the last three years occurred in Northern VA, a confirmation of that market’s leadership in tech as well as the abundant need for immediate talent for its fastest-growing companies. Suburban MD accounted for 25% of H-1B visas awarded, focused around Rockville, which serves as the southern epicenter of life science demand. Of the visas in Northern VA, 9 out of 10 were awarded outside the Beltway, highlighting the diversity of the workforce in Tysons, the Toll Road, and Loudoun County. In Suburban Maryland, 6 out of 10 were awarded outside the Beltway, demonstrating the I-270 Corridor’s dominant life science position. A deeper dive into some of these key submarkets reveals the drivers behind those visa awards: 
  • Tysons: 9,118 H-1B visas were awarded from 2016-2018, with software engineering comprising one out of every five jobs. Capital One was the largest H1-B employer, with 955 visas awarded, driven by its fast-growing tech business lines. Other locally-based tech providers were among the top employers, including MicroStrategy and Cvent, as well as the big four accounting firms.
  • Reston: 5,125 H1-B visas were awarded from 2016-2018, dominated by a mix of government contractor tech companies specializing in cloud computing and cybersecurity, plus true tech companies with HQs in Reston, including the analytics specialist Comscore, and Verisign, the internet domain registry provider. 
  • Herndon: 4,943 H1-B visas were awarded from 2016-2018. Cloud computing providers accounted for one of every four visas, reflecting Herndon’s regional dominance in that sector, both from a federal and private-sector perspective. 
  • I-270 Corridor: 4,441 H1-B visas were awarded from 2016-2018, with life science a key driver. The largest H1-B employers include biopharmaceutical leader AstraZeneca, biotech specialist Meso Scale Discovery, and electronic health records provider DrFirst. 
  • Looking ahead, the anticipated growth of tech inside the Beltway in Northern VA, led by National Landing, is projected to drive a wave of net new domestic talent to the region in the short- and medium-term, plus create a more robust local graduate pipeline in the long-term, thus helping to alleviate concerns of talent shortages. Similarly, if the Suburban MD life science market is to realize its optimal potential, an urban life sciences strategy must solidify, similarly drawing a mix of domestic and international talent. By contrast, the key suburban hubs outside the Beltway will continue to rely heavily on H1-B visas as the existing tech and life science workforces continue to mature and are not backfilled in a large enough scale by a younger demographic that tends to prefer urban, walkable and amenitized neighborhoods inside the Beltway.

    Source: JLL Research

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