What is the magic formula that can turn a city with a traditional economy into a tech hub? Certainly municipalities have been trying to crack this code, given the high salaries and stronger economic growth these companies tend to bring. Likewise developers, drawn by the higher rents tenants are willing to pay for just the right building in just the right part of town.
Different prognosticators use different measurements as they place their bets on which cities will be the next Silicon Valley. RealtyMogul CEO Jilliene Helman, for her part, tracks the cities where tech companies are going on hiring sprees.
As one example, in Austin, Texas, Tesla and Google alone are hiring 15,000 new workers in the coming quarters, with wages between $ 200,000 and $ 1 million per year. In a market with limited supply already, that will likely translate to extraordinary price increases for residential and multifamily, she says.
There are several other pockets across the US where tech companies are hiring at a breakneck pace, a development that will overpower any interest rate increases or other external factors that might overwise put downward pressure on prices this year. Read about her picks in the following slide show.
Austin, Texas. This isn’t widely publicized, but RealtyMogul’s research shows that Google and Tesla alone are hiring 15k people in the next 6 months in Austin —— and those are jobs that pay between $ 200k and $ 1m / year.
In Miami, you have countless companies moving in at a much faster pace than almost anywhere else in the US (possibly on par with Austin, TX), and that’s driving a surge in hiring tech workers.
Also consider that Miami is actively trying to be the top crypto hub in the US and they’re attracting a lot of crypto companies and entrepreneurs.
My take is that now, it’s not just the young and the brave moving out of NYC to Miami — it’s anyone. The city has momentum and it’s accelerating.
Nashville has an $ 84 billion annual healthcare economy and unlike Austin and Miami, it’s still relatively affordable — which is a huge draw for tech workers who are no longer constrained by geography. We believe this will be one of the top up-and-coming tech hubs in the next 5 years.
In order to meet the demand for tech talent, there’s even been a marketing campaign led by the Greater Nashville Technology Council, which hopes to double Nashville and Middle Tennessee’s tech workforce by 2025.
While Miami gets a lot of attention, Tampa is actually the fastest-growing market not just in Florida but in the US as a whole.
Tampa is home to over 50 software and IT companies and is responsible for over 25% of Florida’s tech jobs, with another 2,000 jobs anticipated to be added this year.
Plus, high-profile investors including Microsoft founder Bill Gates and Tampa Bay Lightning owner Jeff Vinik, are putting $ 3.5 billion toward tech-focused real estate with Water Street Tampa, the 56-acre mixed-use downtown redevelopment project.
San Diego. We track the downtown San Diego market closely as a result of a property that we asset manage. At one point, there were only 6 studios available in the entire downtown area as a result of massive in-migration.
There’s also been a surge in life science venture capital investment in San Diego.
In fact, San Diego is noted for attracting high levels of venture capital. In 2020 and 202`it was almost 4x the historical average compared to the prior 5 years, according to Cushman & Wakefield.