As Amazon negotiates for its next location, cities are doubling down to pave the most attractive path for the tech giant. There will be big consequences for the city that lands Amazon, just as these markets are finding from their recent tech expansions.
In recent years, many of the fastest growing U.S. cities have benefited heavily from the tech industry. A single big tech company can swing the growth of an entire market – think of Amazon’s effect on Seattle.
In many other situations, however, cities make extensive plans to develop environments conducive to the existence of tech companies and a tech-educated population. In other words, cities pave the way for companies like Amazon and others to pick them for a new home, so they can benefit from the growth that these companies bring.
Sub-Market Investment
What follows is often a heavy influx of investment in office buildings and multifamily properties within these tech-focused cities – and sometimes even more so, just outside those cities. In fact, the growth of sub-markets outside of major cities has become a consistent trend in the U.S. commercial real estate industry.
At Reonomy, our business model is to aggregate municipal data on every U.S. market, while cleansing and assuring the accuracy of that data, then serving it through an easy-to-use web platform. This data helps us understand submarkets in a way that previously would have required an immense amount of labor hours.
With the increased competition from American cities for tech companies, we wanted to better understand how the growth of a tech hub can influence not only a city center, but the outskirts and suburbs surrounding that city. Using Reonomy data, we’ll look at three U.S. cities with growing tech sectors – Seattle, Dallas, and Raleigh – and the markets growing outside them. We’ll compare office building investment in each city with its submarket to see where the highest levels of growth exist.
