Denver a Top 10 City for Tech Talent, Says CBRE
By Katie Rapone
For the first time ever, Denver is now among the top 10 markets in North America for tech talent. With arguably the best live work play environment in the nation, it isn’t hard to see why the Mile High City is attracting and producing some of the world’s greatest tech talent.
CBRE’s Scoring Tech Talent report analyzes 50 North American markets based on things like tech talent supply, growth, concentration, cost, completed tech degrees and the outlook for office and apartment rent cost growth. Denver currently ranks at No.10 on that list.
According to the report, Denver has a tech talent labor pool of 99,760, or 6.2 percent of its total employment, placing it among the top 10 most-tech-concentrated markets and well above the national average of 3.5 percent. Denver’s average annual tech wage of $100,000 is also a major draw in attracting and retaining talent, ranking 10th out of the 50 markets studied and marking a 15 percent increase in tech wage growth over the last five years.
“Tech continues to play an increasingly larger role in Denver’s ecosphere. We see everything from start-ups to Fortune 500 tech companies opening and expanding their operations here, drawn to our educated workforce and supportive, entrepreneurial culture. On the talent side, people choose Denver for our quality of life, relatively affordable cost of living and high-paying employment opportunities. The net result is a tech market that continues to grow and thrive,” said Alex Hammerstein, senior vice president with CBRE’s Tech and Media Practice in Denver.
Denver produces a strong number of tech graduates, but also continues to draw talent from other parts of the globe. In fact, according to CBRE, Denver added more than 1,500 more tech jobs than tech graduates in the past five years.
“More than any one single company announcement, what really served as the catalyst for putting Denver on the map as a tech hub is our labor base. Headline after headline has talked about our outstanding millennial population growth and educated, highly skilled workforce. That, in combination with initiatives like Denver Startup Week, is what caught the attention of companies like SendGrid, ibotta and Ping Identity and convinced those tech leaders there was a competitive advantage to having an office here,” said Alex Hammerstein, senior vice president with CBRE’s Tech and Media Practice in Denver.
Real Estate Demand
With the growth in tech talent comes increased real estate demand, which often puts upward pressure on prices and creates opportunities for new development.
According to Colin Yasukochi, director of research and analysis for CBRE in the San Francisco Bay Area, strong economic conditions and tightening labor markets are constraining tech talent job growth and increasing costs. “Demand for commercial real estate in large and previously under-utilized regions is on the rise from both start-ups and established companies,” he says.
After employee salary, the second-highest cost for most companies is office rent. Companies continue to pursue the benefits of tech clustering and often place a higher value on specific submarkets and even specific streets where tech talent is ample, states the report. This has led to some competition for office space and caused rental rates in the top 10 areas to increase.
Compared to other cities, Denver’s office rental rate is more affordable, which is likely another reason many tech companies are eager to call Denver home. Average office rents are the highest in Manhattan, followed by the San Francisco Bay Area and Washington, D.C. In Denver the average cost to rent 75,000 square feet is $2,029,719, compared to $4,704,639 in San Francisco and $2,979,750 in Washington D.C.
San Francisco-based company Accelo — that offers Cloud-based software for growing professional services — made the decision to open an office in Denver to support the companies growth.
“In addition to the gorgeous natural surroundings, amazing sunshine, and perfect cultural fit, Denver has a world-class talent base that we know will continue the high-level of services our customers have come to expect and deserve,” said Accelo VP of Sales and proud Denverite, David Taggart.
The city’s continued investment in infrastructure was also very appealing to the company, “Unlike most of the rest of the United States, Denver has been investing in infrastructure – especially transit – for years now, which makes a massive difference to operations and quality of life for any team,” he added.
The following tech companies also opened offices recently in the Denver metro:
- Freestar: New office in Denver (from AZ)
- 10Fold Communications: New office in Denver (from CA)
- Mindflash: New office in Denver (from CA)
- Netflix: New office in Boulder (from CA)
- Strava: New office in Denver (from CA)
- SwitchFly: new office in Denver (from CA)
- Tapingo: New office in Denver (from CA)
- Thanx: New office in Denver (from CA)
- Maxar Technologies: Moving HQ to Westminster (from Canada)
- ORA Interactive: New office in Denver (from IL)
- Upserve: New office in Denver (from RI)
- Carbon Black: New office in Boulder (from MA)
- ezCater: New office in Denver (from MA)
- ChannelAdvisor: New office in Denver (from NC)
- HERE Technologies: New office in Boulder (from the Netherlands)
- Snapfulfil: Opened US HQ in Broomfield (from UK)
In order for Denver to continue to grow as a tech market and compete with other bigger markets, Hammerstein stresses the importance of continued investment in the city and its labor force.
“More population always leads to more congestion but working to further improve our infrastructure will help mitigate the negative effects of that growth. We also need to encourage our schools to keep promoting technology-related education,” he says. “Most importantly, Denver needs to continue to be a destination for world-class tech talent. This means keeping our wages competitive with other markets and encouraging more collaboration between the State and tech community. Programs like Pivot To Colorado by the Colorado Technology Recruiting Coalition are very exciting and a good indicator of how we are on the right path for continued growth.”