News Feed Item

Opportunity for High-Tech Firms Spills Into Suburban Metros, Urban Areas Remain Hot

JLL's High-Tech Office Outlook Reveals What Makes a Market Dynamic and How 34 Markets Make the Grade

CHICAGO, IL and SAN FRANCISCO, CA -- (Marketwired) -- 09/03/14 -- As goes the high-tech industry, so rises the cool factor. Once a high-tech company anchors a neighborhood, housing prices rise, new amenities spring up and unemployment dips. High-tech companies are seeking reasonably priced labor and real estate near their customers in new frontiers giving smaller cities and suburban areas a second economic wind. JLL's latest High-Technology Office Outlook reveals how new and unexpected tech hubs like Detroit and Charlotte are getting a piece of the action.

"Tech companies are looking for new locations for many reasons, not just for intellectual capital, or venture capital funding, but also for 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.

Follow the Hipsters
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 Bay Area, New York's Midtown South, Boston, Seattle, Portland and Austin. Looking beyond the top tier locations is when the economic story gets interesting.

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, and even topping New York City's Plaza District at $85 per square foot.

Meanwhile, rents in smaller markets can be less than half that -- a clear savings opportunity. "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," she concluded.

The New Tech Frontiers
The following emerging centers have their own unique appeal to high-tech firms:

  • Detroit - Connected Cars and Ready Labor: High-tech growth in the Motor City has been expanding thanks to increasing demand for sophisticated vehicle technology. The Motor City also has its fair share of traditional high-tech companies, including Compuware, one of the first companies to move its headquarters from the suburbs to downtown Detroit in recent years. Amazon, Microsoft, Twitter and Google have now joined Compuware in the urban core; Google even announced it would soon launch a Michigan-based fleet of 100 self-driving vehicle prototypes.

  • Charlotte - Fintech Explosion: A financial technology ("fintech") start-up culture is rising here, largely serving the back-office functions for large banks. Evidence can be seen in innovation hubs like the Packard Place building in its central business district. As the state continues to dole out incentives, Charlotte will see relocations like Spectra, a fintech firm bringing 250 or more jobs downtown.

  • Los Angeles - New Tech, Old Hollywood: Los Angeles' Westside is home to a burgeoning group of companies at the confluence of high-tech and entertainment. Video game creator Riot Games is likely to be joined soon by Google and advertising mogul RPA, both are actively looking for space nearby.

  • Indianapolis - STEM Central: The talent pool from local universities producing graduates in the mathematics and science (STEM) fields is a main draw for tech companies to Indy. In addition, Indiana has one of the lowest business tax climates in the U.S., making it attractive to young start-ups and high-growth, middle-market high-tech firms. For example, California-based Systems in Motion is adding 400 jobs by 2017 and leasing new space in suburban Kokomo and Carmel.

  • Orlando - It's a Tech World After All: Over the past year, high-tech has become Orlando's second largest industry with a $14 billion annual economic impact to the metropolitan area. Buildings like the Church Street Exchange -- a former mall re-purposed for tech companies -- have gone from mostly vacant to more than 90 percent leased in less than a year. Initiatives like the technology accelerator Starter Studio and Orlando's Digital Main Street program are also cultivating high-tech growth.

  • South Florida - South Beach, South Valley: Miami is getting some buzz as an international high-tech hub, with Microsoft announcing Miami as its first U.S. based Innovation Center at the downtown incubator Venture Hive. However, incubators such as the FAU Research Park in Boca Raton and LAB Miami, located in the burgeoning Wynwood District, tend to feature space that caters more to creative needs. More established high-tech companies with an eye on Latin America are beginning to show interest too.

"When start-ups and established high-tech companies look to expand, understanding the dynamics of local markets and innovation clusters is essential," said Greg Matter, co-lead of JLL's Technology brokerage group. "While it's common for companies to look at just one factor, such as high-tech employment, when considering new market expansions, JLL's index shows the decision should have greater depth. Each city has its own unique qualities that should be aligned with a company's growth objectives. Companies should look at each location's talent pool, for example, and ask, how are investment conditions? Do we need space to expand? What are the amenities and lifestyle factors for employees?"

*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.

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 "liveable" 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.

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
In past @ThingsExpo presentations, Joseph di Paolantonio has explored how various Internet of Things (IoT) and data management and analytics (DMA) solution spaces will come together as sensor analytics ecosystems. This year, in his session at @ThingsExpo, Joseph di Paolantonio from DataArchon, will be adding the numerous Transportation areas, from autonomous vehicles to “Uber for containers.” While IoT data in any one area of Transportation will have a huge impact in that area, combining senso...
Why do your mobile transformations need to happen today? Mobile is the strategy that enterprise transformation centers on to drive customer engagement. In his general session at @ThingsExpo, Roger Woods, Director, Mobile Product & Strategy – Adobe Marketing Cloud, covered key IoT and mobile trends that are forcing mobile transformation, key components of a solid mobile strategy and explored how brands are effectively driving mobile change throughout the enterprise.
@ThingsExpo has been named the Top 5 Most Influential Internet of Things Brand by Onalytica in the ‘The Internet of Things Landscape 2015: Top 100 Individuals and Brands.' Onalytica analyzed Twitter conversations around the #IoT debate to uncover the most influential brands and individuals driving the conversation. Onalytica captured data from 56,224 users. The PageRank based methodology they use to extract influencers on a particular topic (tweets mentioning #InternetofThings or #IoT in this ...
"Matrix is an ambitious open standard and implementation that's set up to break down the fragmentation problems that exist in IP messaging and VoIP communication," explained John Woolf, Technical Evangelist at Matrix, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
The IoT has the potential to create a renaissance of manufacturing in the US and elsewhere. In his session at 18th Cloud Expo, Florent Solt, CTO and chief architect of Netvibes, discussed how the expected exponential increase in the amount of data that will be processed, transported, stored, and accessed means there will be a huge demand for smart technologies to deliver it. Florent Solt is the CTO and chief architect of Netvibes. Prior to joining Netvibes in 2007, he co-founded Rift Technologi...
What are the new priorities for the connected business? First: businesses need to think differently about the types of connections they will need to make – these span well beyond the traditional app to app into more modern forms of integration including SaaS integrations, mobile integrations, APIs, device integration and Big Data integration. It’s important these are unified together vs. doing them all piecemeal. Second, these types of connections need to be simple to design, adapt and configure...
For basic one-to-one voice or video calling solutions, WebRTC has proven to be a very powerful technology. Although WebRTC’s core functionality is to provide secure, real-time p2p media streaming, leveraging native platform features and server-side components brings up new communication capabilities for web and native mobile applications, allowing for advanced multi-user use cases such as video broadcasting, conferencing, and media recording.
Without lifecycle traceability and visibility across the tool chain, stakeholders from Planning-to-Ops have limited insight and answers to who, what, when, why and how across the DevOps lifecycle. This impacts the ability to deliver high quality software at the needed velocity to drive positive business outcomes. In his general session at @DevOpsSummit at 19th Cloud Expo, Eric Robertson, General Manager at CollabNet, will discuss how customers are able to achieve a level of transparency that e...
Kubernetes, Docker and containers are changing the world, and how companies are deploying their software and running their infrastructure. With the shift in how applications are built and deployed, new challenges must be solved. In his session at @DevOpsSummit at19th Cloud Expo, Sebastian Scheele, co-founder of Loodse, will discuss the implications of containerized applications/infrastructures and their impact on the enterprise. In a real world example based on Kubernetes, he will show how to ...
@DevOpsSummit has been named the ‘Top DevOps Influencer' by iTrend. iTrend processes millions of conversations, tweets, interactions, news articles, press releases, blog posts - and extract meaning form them and analyzes mobile and desktop software platforms used to communicate, various metadata (such as geo location), and automation tools. In overall placement, @DevOpsSummit ranked as the number one ‘DevOps Influencer' followed by @CloudExpo at third, and @MicroservicesE at 24th.
24Notion is full-service global creative digital marketing, technology and lifestyle agency that combines strategic ideas with customized tactical execution. With a broad understand of the art of traditional marketing, new media, communications and social influence, 24Notion uniquely understands how to connect your brand strategy with the right consumer. 24Notion ranked #12 on Corporate Social Responsibility - Book of List.
Established in 1998, Calsoft is a leading software product engineering Services Company specializing in Storage, Networking, Virtualization and Cloud business verticals. Calsoft provides End-to-End Product Development, Quality Assurance Sustenance, Solution Engineering and Professional Services expertise to assist customers in achieving their product development and business goals. The company's deep domain knowledge of Storage, Virtualization, Networking and Cloud verticals helps in delivering ...
Most of us already know that adopting new cloud applications can boost a business’s productivity by enabling organizations to be more agile and ready to change course in our fast-moving and connected digital world. But the rapid adoption of cloud apps and services also brings with it profound security threats, including visibility and control challenges that aren’t present in traditional on-premises environments. At the same time, the cloud – because of its interconnected, flexible and adaptable...
In his session at @DevOpsSummit at 19th Cloud Expo, Robert Doyle, lead architect at eCube Systems, will examine the issues and need for an agile infrastructure and show the advantages of capturing developer knowledge in an exportable file for migration into production. He will introduce the use of NXTmonitor, a next-generation DevOps tool that captures application environments, dependencies and start/stop procedures in a portable configuration file with an easy-to-use GUI. In addition to captu...
SYS-CON Events announced today that SoftNet Solutions will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. SoftNet Solutions specializes in Enterprise Solutions for Hadoop and Big Data. It offers customers the most open, robust, and value-conscious portfolio of solutions, services, and tools for the shortest route to success with Big Data. The unique differentiator is the ability to architect and...