By Ken McCarthy and Robert Sammons
As seasoned commercial real estate researchers we remember the dot-com era and very public implosion of the late 90s. Incredibly, space was being leased up as bankruptcies were announced and fire sales were held on servers, cabling and some really nice office furniture purchased with venture capital.
This first dot-com era was marked by often off-the-chart growth but alas much of the growth was a mirage fueled by free-flowing capital looking for the next big thing. This irrational exuberance ultimately came crashing down as well-funded start-ups realized they missed some fundamentals – like a market for their product.
The lessons of the dot-com era can be seen in today’s Tech growth and expansion, including the real estate footprint of these profit-seeking firms. Due diligence is strong and start-ups define the road to profitability earlier than ever before.
Last year we issued a comprehensive report called Tech Cities 1.0 and utilized our data sets to rank the top markets in the United States where Tech was significant space user.
This year we have updated our methodology and added Canadian markets. The resulting Tech Cities 2.0 also diverges from our first report in replacing the ranked order with three categories that captured the market:
- Cities in which Tech is a critical component of the local economy and CRE market
- Cities in which Tech is a key driver of the local economy and CRE market
- Cities in which Tech is important to the local economy and CRE market
The 25 markets explored have also been profiled in snapshot reports that identify key aspects of their Tech occupancy.
Tech tenants are topical and crucial for urban and suburban planning and growth. Unlike the prior Tech era, we are witnessing a true transformation of what drives our economy, higher learning, locational choices and the occupations that will transform our world.
The newly released Tech Cities 2.0 report along with links to local market snapshots can be found here.
Ken McCarthy has been with Cushman & Wakefield since August 2006. As Principal Economist, he works with the Chief Economist on Cushman & Wakefield’s U.S. economic position and presents it to the public. As Applied Research Lead, Ken is responsible for preparing cutting edge research about the outlook for commercial real estate in the Americas.
Robert Sammons is Cushman & Wakefield’s Senior Director, Northern California Research. Based in San Francisco, Robert’s principal roles include working closely with the C&W research teams across the Northwest – including Northern California, Portland and Denver. Robert is author of numerous documents that delve into a wide variety of real estate and economic trends. He has been a quoted source for all manner of real estate and related economic information in many widely known media outlets across the country. Robert has 29 years of real estate experience as both an appraiser and researcher. He earned a BBA in Real Estate from The University of Georgia and an MS in Real Estate from Georgia State University. Robert is a member of the Urban Land Institute.