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In Charlotte, the technology job growth rate has risen 17.3 percent between 2012 and 2014, placing it above most markets and in the No. 9 spot among the top 30. The technology sector has grown as a result of the overall office market’s growth and stability. Additionally, Charlotte offers lower than average office rents, ranking No. 21 nationally for office rent growth.
Charlotte tech firms have clustered in the very affordable Northeast submarket that has rents 12 percent less than the overall market average. Charlotte is considered a top discount market in general since its rents are already 25 percent below the national average of $28.97 and a destination for tech employers. It is also considered an emerging market with potential for continued growth.
In 2014, Charlotte had 19,389 tech jobs, with the Northeast submarket leading Charlotte’s tech scene. A high educational attainment rating of 41.9 percent of residents with a bachelor’s degree or higher gives Charlotte a skilled labor force. Tech companies have increased their interest in Charlotte; from startups to large corporate users, firms are actively searching for available space. With a vacancy rate under 10 percent, the market is tight but healthy.
Charlotte’s young and diverse workforce, supplied by several highly-respected and high-profile area colleges and universities, adds to tech companies’ interest and attraction to the area.
“A lot of the momentum can be attributed to the University of North Carolina at Charlotte’s talent pool,” said David Hartzell, CBRE’s Charlotte Research professional. “A large portion of the creative and tech firms in the Charlotte area have clustered in the Northeast submarket, home of UNCC, and are benefitting from the prospect of attracting local tech talent. The city has also taken measures to transform part of its in-town market to be more attractive for millennials, which fosters local interest and bolsters talent retention.”
High-Tech Software/Services Job Growth
Ranked by growth rate, 2012 to 2014
Rank Market 2012 to 2014 Growth Rate 2011 to 2013 Growth Rate
1 San Francisco 42.7% 50.9%
2 Phoenix 42.7% 18.6%
3 Austin 33.0% 33.7%
4 Silicon Valley 27.0% 20.0%
5 Nashville 22.7% 29.6%
6 New York 22.6% 22.7%
7 Seattle 18.3% 17.0%
8 Indianapolis 18.0% 20.7%
9 Charlotte 17.3% 13.4%
10 Salt Lake City 16.2% 15.6%
Office Market Rent Growth
Ranked by growth rate, Q2 2013 to Q2 2015
Rank Market Q2 ’13 to Q2 ’15 Growth Rate Q2 ’12 to Q2 ’14 Growth Rate
1 San Francisco 30.7% 34.6%
2 Silicon Valley 28.1% 21.4%
3 Raleigh-Durham 23.4% -0.9%
4 San Francisco Peninsula 21.0% 19.3%
5 Vancouver 18.4% 14.3%
6 Orange County 16.1% 5.2%
7 Boston 14.4% 11.2%
8 New York 14.1% 17.5%
9 Dallas/Ft. Worth 13.4% 12.0%
10 San Diego 12.7% 8.6%
Source: U.S. Bureau of Labor Statistics, Statistics Canada and CBRE Research, July 2015.
The high-tech software/services industry has created 730,000 new jobs since 2009 and was the leading driver of U.S. office market demand, accounting for 20 percent of major leasing activity, through Q2 2015. In many leading tech markets, the sector is even more dominant: in Silicon Valley, Austin, San Francisco and Seattle, high-tech companies accounted for 88 percent, 63 percent, 62 percent and 60 percent of major leasing activity through Q2 2015, respectively.
“The high-tech industry is directly supported by consumer demand and a growing number of high-tech integrated businesses, which should keep the industry strong in the years ahead and provide further support for office markets in the Tech-Thirty,” said Colin Yasukochi, director of research and analysis for CBRE. “Commercial real estate investors must be mindful and have realistic expectations about this historically volatile industry underpinning the health of many ‘Tech-Thirty’ office markets.”
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2014 revenue). The Company has more than 52,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 370 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.
