South Florida made the list when Cushman & Wakefield released its Tech Cities 2.0 annual report that identifies existing and emerging tech centers increasingly driving the North American economy and details their impact on the commercial real estate sector.
A follow-up from last year’s inaugural Tech Cities 1.0 report, this year’s research reviewed all major North American markets, and groups the top cities into three categories based on how important the tech sector is to the local economy and real estate market. The categories are “tech is a critical component, tech is a key driver and tech is important.”
The Miami-Fort Lauderdale-West Palm Beach market falls into the third category meaning tech is an important, growing sector, but there are other important sectors as well.
“South Florida’s emerging tech scene has increasingly become more influential to the local commercial real market,” Chris Owen, Cushman & Wakefield’s Florida Director of Research, tells GlobeSt.com. “This is especially apparent in Miami-Dade, where technology companies accounted for more than 10% of all leasing activity since the beginning of 2017.”
Miami-Dade County Accounts for Largest Activity
In terms of tech-related leasing activity, Miami-Dade County led the way in South Florida. Between January 2017 and mid-year 2018, the tech and life sciences industry accounted for 10.8% of all leasing activity in Miami-Dade. That was followed by 5% in Broward and 4.4% in Palm Beach.
The region ranked 24th in the country for annual university spending on tech-related research and development.
The Kauffman Foundation’s 2017 Index of Startup Activity ranked the Miami-Fort Lauderdale area No. 1 in U.S. for new business creation.
“As tech companies continue to dominate headlines and grow, a key question is how this affects commercial real estate. Building upon our inaugural Tech Cities report from last year, Tech Cities 2.0 offers new data and a further in-depth analysis of the marketplace,” said Revathi Greenwood, Cushman & Wakefield’s Americas Head of Research.
“Tech is no longer limited to just traditional technology companies – media companies, retailers and even law firms are competing for the same spaces and talent as traditional tech companies. While the result can be seen in nationwide trends, we’ve identified key insights that impact companies across every industry,” Greenwood said.
Ken McCarthy, Cushman & Wakefield’s New York-based Principal Economist and Applied Research Lead for the U.S., said the new report demonstrates the profound impact the tech sector has had on commercial real estate in what appears to be one fell swoop but has been building since the financial crisis of 2008.
“Although we expect established markets like Silicon Valley to see continued investment, new tech hubs are emerging across North America, from Provo to Philadelphia, sustaining a period of tech-driven, economic growth unseen since the dot-com boom of the late 1990s,” McCarthy says.