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CHICAGO—High-tech firms have played an increasingly important role in the US office market, but boom times also bring rising costs, and both start-ups and major players have started hunting for spaces beyond the well-known hubs like Silicon Valley. Chicago-based JLL has just completed a national search which aims to help solve the problem. Its researchers sought out “hidden gems” of the tech world, metro areas that provide high concentrations of talent, but remain far more affordable than the top markets.

“It's been one of the fastest growing industries over the course of the cycle,” Julia Georgules, vice president and director of research for JLL, tells GlobeSt.com. “Tech has really exploded,” largely due to the 2007 introduction of the iPhone, along with the growth of social media, e-commerce and cloud-based information storage.

But even with all that expansion, the nation still has only about one million software developers, a fraction of the numbers involved in sectors like finance, making it more difficult to find clusters of workers.

“We wanted this report to be an inspiration,” Georgules says, “and show occupiers some cities that they may not have thought about; markets where you could tap into talent pools.” And they found that “you don't necessarily need to be located in a traditional tech hub.”

Some of the team's findings were unexpected.

“Albany was a surprise,” she says. The capitol of NY was one of five smaller US cities that stood out. It did so partly due to the state's effort, in partnership with Rensselaer Polytechnic Institute and State University of New York Polytechnic Institute, to build a high-tech ecosystem up and down the Hudson Valley. Furthermore, it has several Fortune 500 companies, all of which employ a significant number of computer programmers.

As of 2016, Albany was home to 5,880 computer programmers, JLL found. Although that may not sound like a lot, the metro area has the second-highest concentration of computer programmers nationally.

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“If a city has a higher concentration relative to the national average, it has an ecosystem that can support further growth,” Georgules says. Programmers and software developers are no different than those in any other profession. They tend to settle in cities that have people of similar backgrounds. That way, there is a better chance of having several employment options. And as more firms move in to take advantage of the tech density, it re-enforces the cycle.

Georgules adds that a healthy local economy backed by a major industry is key to creating one of these emerging hubs. But the types of industry that can support this kind of activity are quite diverse. A region with a dense concentration of either healthcare facilities, universities or finance companies could be a candidate. “All of these industries are being disrupted by tech,” and now utilize vast numbers of programmers and software developers.

Columbus, for example, was one of the five hidden gems, and it has a surprisingly strong roster of fashion-oriented firms, all of which use large numbers of tech workers. The metro area holds more than 11,000 computer programmers, and 13,700 people in software development. It is also home to Ohio State University, which gives it a “perpetual supply of talent that graduates every year,” Georgules says.

As reported in GlobeSt.com, the city has also put a lot of effort into beautifying its downtown. The new riverfront parkland and other amenities also act as a magnet for tech workers, many of whom prefer a downtown lifestyle.

Sacramento also made the list. It has a computer programmer talent pool of more than 11,000 people with an average annual salary of $84,000, and Bay Area companies looking to expand an hour north will benefit from Sacramento's 21% discount on wages and significantly lower office rents, JLL found. “We can see it becoming the next spillover market for the Bay Area,” Georgules says.

Colorado Springs and Madison, WI, rounded out the five highlighted cities. The former's high quality of life and its 6,000-strong talent pool of software developers match up well with nearby Boulder, but its commercial office space costs half as much. Supported by the University of Colorado-Colorado Springs, plus a significant military-based economy, companies like Microchip Technology, Northrop Grumman and Lockheed Martin have found a home here.

Madison has already been attracting notice from investors, and it's a little-known secret to existing tech companies. Fueled by the University of Wisconsin-Madison, organizations like Sector67, a non-profit dedicated to the development of the next generation of technology, also support its tech ecosystem. And with just under 9,000 software developers, it has the 10th highest concentration of developers in the country, relative to its size. Furthermore, wages are 40% lower than in Silicon Valley, the highest-wage market.

chi-albany

CHICAGO—High-tech firms have played an increasingly important role in the US office market, but boom times also bring rising costs, and both start-ups and major players have started hunting for spaces beyond the well-known hubs like Silicon Valley. Chicago-based JLL has just completed a national search which aims to help solve the problem. Its researchers sought out “hidden gems” of the tech world, metro areas that provide high concentrations of talent, but remain far more affordable than the top markets.

“It's been one of the fastest growing industries over the course of the cycle,” Julia Georgules, vice president and director of research for JLL, tells GlobeSt.com. “Tech has really exploded,” largely due to the 2007 introduction of the iPhone, along with the growth of social media, e-commerce and cloud-based information storage.

But even with all that expansion, the nation still has only about one million software developers, a fraction of the numbers involved in sectors like finance, making it more difficult to find clusters of workers.

“We wanted this report to be an inspiration,” Georgules says, “and show occupiers some cities that they may not have thought about; markets where you could tap into talent pools.” And they found that “you don't necessarily need to be located in a traditional tech hub.”

Some of the team's findings were unexpected.

“Albany was a surprise,” she says. The capitol of NY was one of five smaller US cities that stood out. It did so partly due to the state's effort, in partnership with Rensselaer Polytechnic Institute and State University of New York Polytechnic Institute, to build a high-tech ecosystem up and down the Hudson Valley. Furthermore, it has several Fortune 500 companies, all of which employ a significant number of computer programmers.

As of 2016, Albany was home to 5,880 computer programmers, JLL found. Although that may not sound like a lot, the metro area has the second-highest concentration of computer programmers nationally.

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Brian J. Rogal

Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.

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