AUGUST ISSUE: Tech’s Top Towns
- Jul 30, 2014
As Diverse Specialties Flourish, New Contenders Carve Out Niches
By Paul Rosta, Senior Editor
The impact of technology industry clients on commercial real estate markets is a well-known phenomenon, but ironically, the term may be something of a misnomer. As many developers, investors and brokers are discovering, “technology” is no monolithic industry. In reality, the tech sector translates into multiple business specialties and magnets, as dozens of cities stake their claim to the technology boom. Along with its highest-profile component, consumer electronics, the age of technology encompasses companies and real estate requirements ranging from finance and insurance to the automotive sector. This creates a raft of opportunities and challenges for real estate stakeholders as they tailor their projects and services to their clients’ needs and anticipate which markets will join the ranks of national high-tech leaders during the next decade.
For now, at least, the top of the heap remains clear-cut. California’s Silicon Valley shows no signs of relinquishing its crown as the premier high-tech hub in the United States, if not the world. Global giants like Oracle, Google and Facebook continue to make Silicon Valley the go-to location for high technology. Its prominence is symbolized by Apple’s 2.8 million-square-foot headquarters in Cupertino. Already renowned for its spaceship-like ringed design by Foster + Partners, Apple’s new home is scheduled for completion in 2016 at a rumored cost of $5 billion.
Though Silicon Valley retains a largely suburban model for a technology hub, the center of gravity for technology firms of all stripes is migrating to urban settings. “I think the biggest change I’ve seen is that technology tenants are seeing the benefits of being located in the city, near highly skilled workers,” said Lori Mason Curran, director of real estate investment strategy for Vulcan Inc., developer of Amazon’s campus in Seattle’s South Lake Union neighborhood. Other established hubs—which are generally considered to include San Francisco, Boston and, most recently, New York City—face competition from a variety of contenders.
Read the full article in the August 2014 issue of CPE. Access is free!