High-tech companies are strategically locating to create buzz and attract talent.
- War on talent and branding is key factor fueling the trend
- Modern corporate space design is used to attract talent and “spice-up” brand appeal
- Sony Pictures, Microsoft, Shopify, Google, Twitter and LinkedIn are some companies in Canada backing the trend also observed in San Francisco, Seattle and New York
Ottawa and Vancouver, June 24, 2014 – The ”Silicon Valleys” of North America are slowly but surely moving into or closer to the downtown cores of major cities in Canada and the U.S., according to a new report and analysis released today by Colliers International. Competition for top talent not keen on commuting or working in “suburbia” and the need to spice up brand appeal are driving a growing number of top-tier, high-tech companies to relocate, open new locations or increase their office footprint at the heart of major cities, from Vancouver, Seattle and San Francisco in the West Coast, to Ottawa, Toronto and New York in the East.
According to the Colliers report, the rise of software and web-based companies, coupled with workforce generation shifts and dynamics, are the main instigators of the trend. “Many tech companies have come to realize that their major assets are not the products or services they offer, but the pool of talent that develops and enables these offerings,” says Kelvin Holmes, managing director with Colliers International in Ottawa. “As such, an office location that provides proximity to public transportation and amenities, an environment that facilitates creativity, collaboration and enables flexible workspace design, becomes a determining factor in terms of where a company opens up shop. As a result, more ‘traditional’ factors such as competitive lease rates, spacious parking and lower taxes that used to entice companies into the suburbs are not as differentiating anymore.”
The Colliers High-Tech Movement report also provides a top-line overview of Canada’s tech hubs in Ottawa and Vancouver, focusing on recent market activity as it relates to the relocation and growing footprint of tech companies in the downtown core. The entrance of Sony Pictures Imageworks and the recent decision of Microsoft to expand its presence in Vancouver are only two examples featured in the report as a testament to the trend. This is also backed by Ottawa-based Shopify’s decision to expand its current downtown office space and occupy an additional 100,000 square feet of brand new, class A office space.
“The migration of tech companies into the downtown core is not consistent and still varies in scope and intensity between various cities,” adds Kelvin Holmes. “Nevertheless, the reasons that started this movement are expected to endure. For landlords with relevant properties, it means another stream of potential tenants from an industry traditionally located outside of the city centre. On the flip side, the increased interest form tech companies to ‘move-in’ is likely to create pressure on current downtown core tenants competing not only for talent, but also for lucrative office space.”
> Download full report in Market Insights section.