This week on NVTC’s blog, Ryan Miller of NVTC member company CBRE highlights CBRE’s in-depth analysis of the Country’s Top 50 Markets for tech talent, “Scoring Tech Talent,” and what it means for companies regionally and nationally as strategic decisions are made on how and where to grow.
Technological advancements continue to overwrite the previous file for how to operate in our personal and professional lives. To keep up with the rapid pace of change today, companies spanning the spectrum of all industries are making investments to insure that their people, processes and products align with these advancements in an effort to establish and maintain a competitive advantage.
These investments start with “people,” as all innovation emanates from human creativity, knowledge and expertise. Accordingly, companies will make a concerted effort to expand in markets where there is the highest concentration of tech talent, and do so in a fashion that caters to the needs and aspirations of the workforce. Understanding those demographics and the underlying fundamentals of where the tech talent clusters are located – such as market rents, labor costs, infrastructure and cost of living – allows for the development of much more informed hiring, acquisition and overall capital investment and deployment strategies.
In order to more fully understand the fundamentals of the top tech talent markets, CBRE performed a detailed study of metropolitan areas throughout the United States and has answered some key questions about tech talent, such as: What is tech talent? What do tech talent markets look like? Why does tech talent cluster? How does tech talent impact commercial real estate? The end result is a comprehensive report that lists the top 50 markets throughout the U.S. based upon a multi-dimensional index and provides companies with information to make informed real estate decisions.
The following provides a glimpse into the characteristics that define the components of a top tech talent market:
- A high degree of education attainment: nearly 75% of the top 50 markets have an education attainment rate greater than the U.S. average
- The abundance of Millennials: those markets with the greatest concentration of millennials and millennial growth.
- Tech Talent Clustering: firms located in tech talent clusters have a greater labor pool and benefit from the inherent knowledge transfer within those markets. This leads to more collaboration, sharing of resources and – in turn – innovation.
The connection between tech market characteristics and a company’s real estate strategy is significant. Specific submarkets, or even specific areas of submarkets, might be significantly more desirable and drive rental rates considerably higher than comparable buildings in the same general area. This dynamic, combined with labor costs, provides a meaningful perspective into a company’s potential expenses in a top tech talent market.
For example, in the Northern Virginia market, the tech talent has clustered in the Dulles Corridor, and specifically in the Reston Town Center, due to the abundance of amenities, proximity to densely developed housing, a well-designed transportation infrastructure and the existence of other large companies with a significant focus on technology. Accordingly, rental rates in this subset of the market are markedly higher than comparable buildings that sit just outside of the Reston Town Center boundary.
Building a real estate strategy around tech talent hot spots could prove very successful for companies desiring to attract and retain the best talent that the country has to offer. With the proper analysis, guidance and diligence, the opportunity to create a distinct competitive advantage could be just around the corner.
To read the comprehensive report, please click here.
Ryan Miller is a member of the CBRE’s Occupier Advisory and Transaction Services Group in the McLean, VA office, where he and his team introduce best-in-class resources and processes to support their clients’ corporate objectives through customized real estate strategies, both regionally and nationally. Ryan can be contacted at firstname.lastname@example.org, and you can learn more about the company at: www.cbre.com .