Denver is a better option than Baltimore, Philadelphia and Washington, D.C., when it comes to places for growing startups and established tech firms looking to expand.
The Mile High City has more highly educated workers and lower lease rates than San Francisco, Silicon Valley and other tech hubs, according to a new report from the commercial real estate firm JLL.
"While it's true that economic expansion, in general, is beginning to slow after nearly seven years of growth, the technology sector remains the leading industry for real estate expansion in the United States — driving nearly 25 percent of leasing activity across the country over the past two years," the report states.
Denver is the ninth top market when it comes to tech leasing. That's partly due to the California-based software company Autodesk leasing 24,000 square feet in downtown Denver, according to JLL.
Altogether, technology companies rented 992,091 square feet in Denver from third quarter 2015 to second quarter 2016.
"Within nearly all sectors — but particularly so with tech — we've seen two years' worth of companies flooding the downtown core. Doing so allows them to take advantage of the city center's ever-increasing concentration of young and talented labor," senior research analyst Mandy Seyfried said in the report.
Historically, Boulder was home to the majority of the state's tech firms.
"Smaller firms remain firmly rooted within Boulder, but a trend has now emerged: expanding companies are increasingly considering a move down the U.S. 36 Corridor to save on rent. Or, they're eyeing Denver's central business district to access its labor pool," senior research manager TJ Jaroszewski said in the report.
JLL refers to this trend as the "millennial effect." The company warns that rising property values in Denver and a lack of affordable parking might prove a challenge for the city in attracting tech firms going forward.
Business & data reporter Adrian D. Garcia can be reached via email at [email protected] or twitter.com/adriandgarcia.
Subscribe to Denverite’s newsletter here bit.ly/DailyDenverite.
