High cost of living and doing business hasn’t put a damper on growth at tech firms, according to a survey by the CBRE commercial brokerage firm. And in a sense, it says, tech company growth is a tide that lifts all boats.
CBRE said its top three markets — San Francisco, New York City and Silicon Valley — have not faltered because of high costs. In fact, tech jobs there have been growing rapidly, led by San Francisco at 41 percent, New York City at 22 percent, and Silicon Valley at 18 percent over the past two years. In all, tech jobs grew in 18 of the markets.
Yet San Francisco topped both areas, with rent rates also growing at 44 percent during the study period.
The report “Tech-Twenty Office Markets,” looking at 20 markets, sees tech company growth boosting local economies and office prices. It says:
“With the high-tech economy growing nearly six times faster than the national average, we expect that these submarkets will continue to outperform, helping to counterbalance tepid job growth in other sectors and the uncertain economic environment.”
For instance, it ranked San Diego fifth in office rental rate increases in all sectors but 15th in job growth in areas such as computer systems, software publishers, data processing and hosting, Internet publishing and Web search, and online shopping and auctions, reports UT San Diego. At the same time, office rents dropped 7 percent in Orange County and jobs declined by 2 percent.
The report contends that high-tech cities are better off overall, saying:
“High-tech growth cycle is still in early stages with further growth and business cycles ahead. While economic worry has surfaced within high-tech, both consumers and venture capitalists have responded by focusing spending and funding on key high-tech areas that should fuel further growth.”
