This has necessitated pursuit of a geographic-diversification strategy for growth that seeks out sources of labor, both existing and in the pipeline, driving expansion into mostly larger markets with universities that produce tech-degree graduates. Cost reduction is also a motivating factor in relation to noncore functions within tech firms, such as sales and administrative support. Most markets outside the Bay Area have more available labor and lower costs for labor and real estate. The average office rent in the Bay Area is about $75 per square foot annually with a 5% vacancy rate as of Q4 2019.

Is there anything that the big gainers in these results have in common?

The markets receiving the most inflow from tech firms have two major things in common: a large existing workforce and university infrastructure. For example, New York and Washington, D.C., are only modestly less expensive to operate in compared with the Bay Area; Their tech growth indicates that talent acquisition and growth potential can be more important than cost savings. Phoenix and Nashville are markets benefitting from their lower costs and available labor supply.

If you do this analysis in 2021, what do you expect we'll see?

I expect to see a continuation of the geographical diversification trend as tech firms seek out the right talent in the right location that furthers their growth strategies and creates better workforce stability.