Austin is feeling the tech crunch. According to CBRE Research’s 2016 Tech-Thirty Report, of the 30 leading technology markets in the United States and Canada, Austin maintains the No. 3 spot in terms of high-tech job growth.
We follow Phoenix at No. 2 and, unsurprisingly, San Francisco at No. 1.
Over the past five years, the tech industry has been the fastest growing subset of the labor market, creating 780,000 new jobs at a 7.3 percent growth rate. In that time, the industry also accounted for nearly 20 percent of all office leasing activity.
CBRE’s report shows which markets have the highest potential growth and value, which markets benefited most from tech industry growth, and which submarkets command rent premiums or offer discounts.
In Austin, high-tech jobs grew 33.3 percent from 2013 to 2015. That was evenly paced with 33.4 percent growth from 2012 to 2014.
The report also shows that average office rents in Austin's top tech submarket, Northwest, rose 15.8 percent to $32.99. That compares to a 15.3 percent growth rate in the overall market for the same time period.
“Austin is approaching a maturity level in this cycle, though our record absorption levels indicate rental rates will likely continue to climb. Mature tech companies continue to cluster in the Northwest submarket, which has a lot going for it — extensive development in The Domain offers new amenities to support talent recruitment and retention, while residential development is booming in the surrounding suburbs," says Erin Morales, Senior Vice President, CBRE, Technology & Media Practice in a release.
Another Texas tech hub, Dallas-Fort Worth, ranks No. 10 on the list, up from the 17th spot last year.
“DFW has become a major tech market to be reckoned with,” says Jeff Eiting, vice president and co-leader of the technology and media practice group in CBRE’s Dallas office. “With more than 90,000 high-tech jobs, our tech workforce is twice the size of Austin’s and growing.
DFW boasts more affordable rents than Austin, notes the report.
“Despite the rent growth that DFW has seen over the last couple years, this market continues to be affordable compared to other large tech markets,” says Clay Vaughn, senior vice president and co-leader of the technology and media practice group in CBRE’s Dallas office. “The report cited DFW as one of the best value tech markets because we offer a great combination of low office rents along with a growing high-tech labor pool.”