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The Urban Land Institute recently listed San Jose as one of the top three emerging real estate markets in the country of the 51 metro areas surveyed.Below are key points of why San Jose ranked in the top three for investment, development and home building, according to ULI:

• Employment—50,000 jobs since 2007 with 25% of them in high paying tech industry fields. In a recent survey conducted by ManpowerGroup, the San Jose region was ranked number one in the “The Best Cities for Jobs this Spring.”
• Gross Metro Product per Capita—4^th in the country i.e. disposable income
• Metro Area Education Ranking—2^nd highest # of college educated graduates in the country, only behind Washington DC
• Echo Boomers—Of the top ten markets in the country, San Jose ranked 4^th highest with almost 16% of the population.The echo boomers are under the age of 40, highly educated; prefer metro markets, not interested in home ownership, and prefer the flexibility of renting as much as they do the portability of their work environment and their jobs. Recently, Forbes magazine named San Jose as the number one city in the “Ten Happiest Cities to Work for Young Professionals” ranking.
• Supply Constrained—San Jose is a mature land constrained area with high barriers to entry.

The tour was sponsored by Colliers International, Hoge Fenton Jones & Arpel, AEI Consultants, Equity Office, Republic Family of Companies, Garden City Construction, Johnson & Yau, Legacy Partners, 50 West, Barry Swenson Builder, Embarcadero Capital Partners LLC in partnership with the City of San Jose and the San Jose Downtown Association.

According to a recent market report from Cornish & Carey Commercial Newmark Knight Frank, while downtown San Jose office vacancy remains relatively high, it has vastly improved since its peak of over 30% in the second quarter of 2010. Class A office vacancy is currently at 21% and was closer to 26% just a year ago, the report says.

“Most of our vacancy reduction has come from the technology sector,” explains Anne Ralston, a SVP in Cornish & Carey Commercial Newmark Knight Frank's Santa Clara office. “The recent new deals in downtown San Jose would be weighted 65% technology tenants vs. 35% from professional services—in terms of square footage acquired. We have yet to land the large technology tenant who would take 100,000-300,000 square feet. However, we anticipate that we will lure a headquarters technology tenant to the downtown in 2013. Between the incentives that the City of San Jose is offering and the landlord incentives, it will create a compelling case to relocate to downtown.”