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Cities like Nashville and Oklahoma City grew their tech talent pool by 39% between 2010 and 2013.
As the demand for tech talent increases in these cities, however, so does the cost of office space. In San Francisco, the high-tech industry accounted for 95% of the 3 million square feet of office occupancy gains since 2013, while rents in the city have more than doubled since 2010. And it's not just big cities that have been feeling the tech surge. Smaller markets, such as the south and midwest, have seen a significant boost as well.
According to a study by CBRE, a leader in commercial real estate services, Nashville and Oklahoma City both grew their tech talent pools by 39% between 2010 and 2013. This growth, in turn, contributed to increased wages, employment, and office rents. And though commercial real estate costs are slowly rising in these markets, it's nowhere near the skyrocketing costs of Silicon Valley.
"Tech talent growth rates are the best indicator of labor pool momentum and it's easily quantifiable to identify the markets where demand for tech workers has surged," says Colin Yasukochi, director of research and analysis for CBRE. "Tech talent growth, primarily within the high-tech industry, has recently been the top driver of office leasing activity in the US."
For companies seeking affordable commercial office space without the need to sacrifice on talent, the following eight cities on this list are worth considering as an alternative to Silicon Valley.
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1. Oklahoma City, OK
Percentage increase in tech talent: 38.9%
Total number of tech talent employed: 17,520
Median annual wage: $67,190
2014 annual office asking rent: $15.70 psf
While Oklahoma City is best known for its large mining and livestock market, its technology sector is fairly close behind. Between 2010-2013, Oklahoma City led the pack as one of the fastest growing small tech markets in the country, with affordable office rent to boot. "It's not surprising to see Oklahoma City on this list," notes Brent Conway, CBRE vice president. "With 17 institutions of higher learning in the greater metro area, we have a large, very talented labor pool coming into the workforce each year."
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2. Nashville, TN
Percentage increase in tech talent: 38.5%
Total number of tech talent employed: 22,720
Median annual wage: $70,448
2014 annual office asking rent: $19.74 psf
The nation's country music capital saw a major boost in demand for technology talent over a three-year span amounting to a 38.5% increase. Between January 2014 - February 2015, computer systems analyst, computer user support specialist, and software developer topped the list as the most in-demand positions in Nashville.
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3. Charlotte, NC
Percentage increase in tech talent: 27.9%
Total number of tech talent employed: 37,360
Median annual wage: $86,702
2014 annual office asking rent:$20.59 psf
Banking has long dominated Charlotte's economy, but the city's technology sector has steadily been on the rise. Energy companies like Duke Energy have beefed up their tech recruiting, and the city also boasts some of the highest median tech wages within the market.
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4. Indianapolis, IN
Percentage increase in tech talent: 23.7%
Total number of tech talent employed: 30,340
Median annual wage: $74,552
2014 annual office asking rent: $17.35 psf
Despite being a smaller metropolitan area that is not widely associated with high tech, Indianapolis has a thriving tech scene. Companies such as Allison Transmissions and Bell Industries are providing jobs to people in the city, as well as drawing prospective employees from larger metropolitan cities looking for a change of pace. The growth is expected to continue into the next decade.
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5. Tampa, FL
Percentage increase in tech talent: 20.0%
Total number of tech talent employed: 38,490
Median annual wage: $74,858
2014 annual office asking rent: $20.30 psf
This city is of course best known for its beaches, but it's actually headquarters to several large companies in the tech sector, including TECO Energy and Tech Data. It's also an outpost for companies like Verizon, which employs 14,000 people from the area.
Daniel Ramirez/Creative Commons
Daniel Ramirez/Creative Commons
6. Oakland, CA
Percentage increase in tech talent: 18.0%
Total number of tech talent employed: 48,610
Median annual wage: $97,104
2014 annual office asking rent:$28.60 psf
Given Oakland's close proximity to Silicon Valley and San Francisco, it's no wonder the city boasts the largest number of employed tech talent, the highest median wages, and the most expensive real estate on the list. Oakland also touts the most diverse tech pool on the list with females making up 25% of the tech workforce.
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7. San Antonio, TX
Percentage increase in tech talent: 15.7%
Total number of tech talent employed: 26,100
Median annual wage: $75,337
2014 annual office asking rent: $20.34 psf
While Austin has long been dubbed Texas' main tech hub, in recent years, San Antonio has been making strides to take the crown. Collaborative co-working spaces such as Geekdom - created by Rackspace CEO Graham Weston and software entrepreneur Nick Longo - are bringing the best and brightest tech talent together to spark tech innovation. The co-working space has birthed startups like Parlevel Systems and TrueAbility.
Garrett/Creative Commons
Garrett/Creative Commons
8. Salt Lake City, UT
Percentage increase in tech talent: 13.0%
Total number of tech talent employed: 24,940
Median annual wage: $74,868
2014 annual office asking rent: $20.40 psf
Silicon Valley-based companies such as Adobe and Twitter have expanded their businesses to Salt Lake City for its growing tech workforce and affordable real estate. The city has seen a 31% boost in tech employment in the past decade with no signs of slowing down.
Click here to learn about CBRE's commercial real estate offerings in these cities.
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