Growing tech sector creates jobs, housing
Seattle’s tech sector grew after the new 1.7 million-square-foot Amazon headquarters was welcomed into the South Lake Union neighborhood, and now Facebook and Zulily are hoping to open up even bigger offices in the neighborhood. With the influx in tech businesses, real estate in Seattle neighborhoods such as Lake Union is expanding.
When Amazon’s headquarters moved to South Lake Union, it contributed to new housing and job growth in Seattle. Since 1995, the neighborhood has added 12.5 million real estate developments and 23,000 jobs, according to a report titled Public & Private Investments in South Lake Union.
CBRE Global Research and Consulting released a report stating the high-tech real estate boom in South Lake Union is rated No. 1 overall in demand for tech space in the country. South Lake Union expanded by 22 percent to beat out Portland’s Hillsboro neighborhood, which grew 19 percent and San Francisco’s SOMA area at 11 percent. This rapid growth is partly due to the fact that the neighborhood has gone through a rapid overhaul in the past few years.
Tech start-ups such as Gympse, Zipline Games and the portfolio companies of TechStar, have created a niche job market in the neighborhood. But with the additions of these companies comes more businesses to the area that are attracted to the area because of the increase in traffic. CBRE’s report also noted that the increase in tech companies often leads to an overall office market recovery.
“With the high-tech economy growing nearly six times faster than the national average, we expect that these submarkets will continue to outperform, helping to counterbalance tepid job growth in other sectors and the uncertain economic environment,” Colin Yasukochi, CBRE Global Research and Consulting’s director of research and analysis said.
Seattle ranked just behind Austin and Silicon Valley in terms of the overall market absorption growth, according to the report. This is good news for tech companies looking to relocate to the area because the rent for office spaces has not yet increased as much as other popular areas. Instead of the traditional office spaces, new tech markets are creating a hip, trendy environment to completely revamp the tiresome blueprint of traditional office buildings.
Seattle ranks 14th in rent out of 20 cities studied, and the rent has gone down 2 percent in the past two years. Other big tech markets like New York and San Francisco had rent spike 22 percent and 14 percent, respectively.