Region’s bid for Amazon headquarters may be boosted by new CBRE report
By David Pendered
Metro Atlanta’s high tech sector has received a positive review in a new report from CBRE, which may be helpful in the state’s quest to convince Amazon to locate its second U.S. headquarters in the region.
Metro Atlanta is attracting so many high tech jobs that it’s driving up the price of office space, especially in Midtown. Metro Atlanta ranks 3rd in the United States and Canada for price hikes over the past two years that are attributable to the influx of high tech firms, according to CBRE’s report.
The report appears to affirm growth rates in the sector that are illustrated by just the city of Atlanta bringing in more than 6,000 technology jobs since the start of 2016, as reported in September by Eloisa Klementich, president and CEO of Invest Atlanta, the city’s development arm.
CBRE provides figures that support common refrains among the region’s boosters as they solicit high tech firms to locate in the region. The claims include a lower cost of living than in other cities, which can equate to lower overhead for the employer; the presence of several universities that educate the high tech workforce; and the size of the high tech workforce already in the region.
These qualities help ensure that metro Atlanta typically makes the list of pundits who rank the regions that have a realistic chance of winning the Amazon HQ2. That’s as in Headquarters No. 2, after the Seattle campus.
To pick just one such list, the Irish gambling site Paddy Power ranked Atlanta No. 1, at 2-1 odds, followed by Philadelphia at 7-1 odds, Boston at 8-1 odds and Toronto at 9-1 odds, according to an Oct. 24 report by money.cnn.com. (The rankings have shifted since then, a clear indication that punters see a heated contest to win a company that would bring 50,000 well-paid jobs to a region.)
Here’s how the four cities stack up in the criteria that may be part of Amazon’s criteria in its site selection. From CBRE’s report:
Labor cost for a software engineer
- Metro Atlanta – $101,833
- Philadelphia – $103,911
- Boston – $111,085
- Toronto – $85,987 CAD, or about $67,670 USD
Educational attainment, bachelors degree
- Metro Atlanta – 37 percent
- Philadelphia – 36 percent
- Boston – 46 percent
- Toronto – 32.4 percent
Employment in high tech software or services
- Metro Atlanta – 75,058
- Philadelphia – 39,708
- Boston – 113,531
- Toronto – 126,300
In a take-out on the metro Atlanta market, CBRE selected three hot topics:
- “Atlanta stands out as a strong tech-job creator and talent attractor, with access to top talent from local universities such as Georgia Tech, the University of Georgia, Georgia State University and Emory University.
- “Corporate engagement with educational institutions is fostering lasting partnerships between talent producers and businesses looking for innovation beyond the startup stage.
- “High educational attainment, access to talent and a relatively low cost of living and doing business are all advantages of the Atlanta market.”
To be sure, CBRE didn’t conduct its study or release its report to observe on the Amazon site selection. Rather, the report is part of the real estate services and investment firm’s effort to inform on the status and trends in various markets.
This particular study focused on the relation between office rent pricing and the nature of the high tech sector in the top 30 tech centers located in the United States and Canada.
The trend affecting commercial landlords is that high tech companies are taking office space that historically has been taken by lawyers, financial services and other providers of professional services.
The report affirms the dominance of the Midtown submarket.
Office rents in Midtown are $29.50 per square foot, which is nearly 18 percent higher than the overall market. There’s less vacant office space in Midtown than the overall market – 14.8 percent vacancy rate in Midtown compared to 17.6 percent for the overall market. The report observes: “This is leading some tech firms to look to Downtown and North Fulton in order to expand.”