Dear Northwestern Exposure:

You're right on, and what one sees within the booming innovative advanced technology business in Seattle and other regions that enjoy comparative advantages in cost of living and availability of technically skilled workers confirms your observation. According to JLL Research, Seattle experienced a 53 percent growth of tech office space, from 1,150,000 square feet in 2014 to 1,765,000 square feet in 2015. While its square footage was far less than Seattle's, the Bay Area's total tech office space increased 102 percent, or from 371,000 square feet in 2014 to 649,300 square feet in 2015. JLL also reports on the differential in the number of cranes, a useful insight for investors. In January of 2017, there were 62 cranes in Seattle while only 24 in San Francisco. Tech office space is cheaper in Seattle, and the greater profusion of cranes dictates that this will continue to be the case.

But lower space occupancy costs are not the most important advantage that Seattle provides. The most important comparative advantages offered by Seattle are the lower cost of living, while still providing an environment that, like San Francisco, offers many of the amenities that appeal to educated young tech workers. The fact that Seattle and Washington State do not charge residents income taxes also contributes to making paycheck dollars go further in Seattle than San Francisco.

These consumer cost of living advantages enable Seattle companies to pay lower salaries while the local purchasing power of the take home pay dollar is greater. The annual median tech salary is $108,000 in Seattle and $118,000 in San Francisco. Anyone who was paying even a little bit of attention in Economics 101 will not be surprised by the cause of the lower living costs in Seattle. Since the mid-1970's, San Francisco's development-stymying planning and approval process has caused additions to the annual increase in housing to lag further behind the annual demand increases fostered by rising employment and wages. The result is San Francisco home prices and rents are close to 50 percent higher than in Seattle. Average monthly apartment rents in Seattle are $2,500, while in San Francisco they are $4,215. The median home price in Seattle is $604,000, while in San Francisco it's $1,200,000.

Both cities are beautiful, progressive politically and offer nearby recreational activities. Even given that Seattle has more rain, one can conclude that Seattle will continue to attract tech companies from the Bay Area. But this does not suggest that Silicon Valley and San Francisco will cease being dominant tech industry locations.

SAN FRANCISCO—Wouldn't it be convenient if someone had clear, intelligent answers to most of your CRE-related questions? Problem solved. Nina J. Gruen, a.k.a. Ms. Real Estate, a.k.a. the principal sociologist overseeing market research and analysis at Gruen Gruen + Associates, is here to answer readers' questions.

Dear Ms. Real Estate,

This spring, I attended an Urban Land Institute conference in Seattle. My last visit to Seattle was in 2010. I always make an effort when attending these conferences to see as much of the downtown and nearby neighborhoods as time permits. South Lake Union was beyond recognition. I understand that a good proportion of the gigantic increase in commercial and residential space is due to Amazon's space needs, which are off the charts, as well as the significant growth that has taken place in the tech industry. What was of particular interest to me was that the rent and sales prices for this new space were approximately half of what they are in San Francisco, where my company is located. Isn't this cost of living differential likely to encourage an increasing shift of Silicon Valley and San Francisco tech companies either moving or expanding their businesses to Seattle?

—Recovering from My Northwestern Tech Exposure

Dear Northwestern Exposure:

You're right on, and what one sees within the booming innovative advanced technology business in Seattle and other regions that enjoy comparative advantages in cost of living and availability of technically skilled workers confirms your observation. According to JLL Research, Seattle experienced a 53 percent growth of tech office space, from 1,150,000 square feet in 2014 to 1,765,000 square feet in 2015. While its square footage was far less than Seattle's, the Bay Area's total tech office space increased 102 percent, or from 371,000 square feet in 2014 to 649,300 square feet in 2015. JLL also reports on the differential in the number of cranes, a useful insight for investors. In January of 2017, there were 62 cranes in Seattle while only 24 in San Francisco. Tech office space is cheaper in Seattle, and the greater profusion of cranes dictates that this will continue to be the case.

But lower space occupancy costs are not the most important advantage that Seattle provides. The most important comparative advantages offered by Seattle are the lower cost of living, while still providing an environment that, like San Francisco, offers many of the amenities that appeal to educated young tech workers. The fact that Seattle and Washington State do not charge residents income taxes also contributes to making paycheck dollars go further in Seattle than San Francisco.

These consumer cost of living advantages enable Seattle companies to pay lower salaries while the local purchasing power of the take home pay dollar is greater. The annual median tech salary is $108,000 in Seattle and $118,000 in San Francisco. Anyone who was paying even a little bit of attention in Economics 101 will not be surprised by the cause of the lower living costs in Seattle. Since the mid-1970's, San Francisco's development-stymying planning and approval process has caused additions to the annual increase in housing to lag further behind the annual demand increases fostered by rising employment and wages. The result is San Francisco home prices and rents are close to 50 percent higher than in Seattle. Average monthly apartment rents in Seattle are $2,500, while in San Francisco they are $4,215. The median home price in Seattle is $604,000, while in San Francisco it's $1,200,000.

Both cities are beautiful, progressive politically and offer nearby recreational activities. Even given that Seattle has more rain, one can conclude that Seattle will continue to attract tech companies from the Bay Area. But this does not suggest that Silicon Valley and San Francisco will cease being dominant tech industry locations.