According to CBRE’s annual “Scoring Tech Talent” research report, Chicago continues to show strength in the tech sector, with its total employment now at 136,340, up 34.9 percent from five years ago. This makes Chicago the sixth-largest tech market in the nation in terms of employment base.
Chicago maintained its top-fifteen position on the annual Tech Talent Scorecard, which ranks 50 U.S. and Canadian markets according to their ability to attract and grow tech talent. Coming in at #13 for the second year in a row, Chicago has become one of the top destinations for tech talent in the country.
Impact on Office Markets
This rapid growth has positioned the tech industry as one of the top-drivers of leasing activity in Chicago. In 2015, the tech industry accounted for 24 percent of all leasing in the CBD.
“The tech-sector in is now the third-largest driver of office space in the city, and has brought a new dynamic to Chicago’s already diverse tenant base,” said Brad Serot, executive vice president at CBRE. “Last year was another strong year in activity and several tech firms are looking to expand here in the near future.”
Chicago metro area office asking rents have risen approximately 11 percent to $29.07 per sq. ft. from Q1 2011 through Q1 2016. The vacancy rate has dropped from close to 18 percent to 14.4 percent in that same time period.
Other Chicago findings in this year’s tech report:
- Chicago a Leader in Educational Attainment/Tech Degrees: Chicago was the fourth-ranked market in terms of the number of tech degrees completed from 2013-2014, with 10,454 degrees earned. Other leading markets for tech degrees completed include New York, Washington, D.C., Los Angeles, Phoenix, Boston, the San Francisco Bay Area, Atlanta, Columbus and Detroit.
- Very Affordable Compared to Peer Cities: Chicago has a rent-to-tech wage ratio of 20.6 percent, making it much more affordable than other large tech markets such as New York City (33.2 percent), Los Angeles (27.6 percent) and Boston (25.3 percent). Chicago’s business affordability was also notable, as it came in at #21, with an estimated annual cost of $39.76 million for a tech firm with 500 employees in 75,000 square feet, far behind the top spot of the Bay Area with $56.36 million for the same requirements.
- Start-Up Activity Strong: The presence of higher educational institutions helps create a vibrant start-up scene, which is essential for a healthy tech sector. The University of Illinois and Northwestern University are both strong start-up centers in the Chicago area and have produced a combined 352 start-up tech firms since 2010, eclipsing other major tech markets such as Washington, D.C., Austin, Atlanta and Dallas.
To read the entire Tech Talent report, click here.