Rapid growth in jobs and office rents puts Seattle among leaders in top 30 tech markets

Another new report is shining a light on Seattle’s rapid growth among leading tech hubs.

CBRE’s annual Tech-30 report, which measures the tech industry’s impact on North American office real estate markets, shows Seattle is the sixth fastest growing tech market in overall office rent growth. Rents jumped 12.4 percent between Q2 2017 and Q2 2019, up from 11.7 percent in the previous two-year period, CBRE reported.

Seattle is also fourth in tech employment growth, with a rate of 23.7 percent during 2017 and 2018. The 34,000 new jobs added in the market were the highest number among any of the Tech-30 cities.

Vancouver, B.C., San Francisco and Toronto were the top three markets ahead of Seattle in the overall ranking of the 30 markets.

“Seattle’s tech industry is among the largest in North America and is growing at a rapid pace,” said CBRE’s John Miller, senior managing director of the firm’s Seattle office. “This growth, combined with the second strongest tech labor pool in North America, means we’re going to continue to attract tech firms looking to take advantage of our intellectual capital, which will continue to strengthen office fundamentals.”

Major technology companies have leased nearly 2.8 million square feet of office space in the past year, accounting for 45 percent of all leasing activity in the Puget Sound market, CBRE reported. Much of this space is for expansion purposes, which will add even more jobs to the tech industry in the near-term. And perhaps they will be filled by area tech grads, whose number grew by more than 60 percent.

The report also looked at rent gains, rent premiums and net absorption in submarkets that are hot tech spots in the larger overall markets. South Lake Union, home to Amazon and major tech outposts for Facebook, Google and Apple, showed a 6.4 percent rent growth in the past two years and commands a 13.4 percent premium over the overall market average, CBRE reported.

CBRE’s report comes on the heels of last week’s Q3 2019 PayScale Index, which tracks quarterly and annual trends in compensation, and found that wages increased 4 percent year over year in Seattle. The city outpaced the national average of 2.6 percent and only trailed San Francisco, at 4.3 percent.

~Kurt Schlosser, GeekWire

Report: Tech makes up almost all new office jobs in Seattle


Seattle observers are well aware of the tech industry’s role in the city’s economic boom, but a new report takes it to a new level, finding that more than nine of every 10 office jobs created over the last two years came from the tech sector.

The report by real estate firm CBRE, finds that Seattle tech firms added 23,575 jobs in 2015 and 2016, accounting for 93 percent of all office jobs in the city created during that time span. In raw numbers, Seattle also created more tech jobs than any other single market in the survey.

Seattle has been buoyed by massive growth from hometown tech giant Amazon, which employed 541,900 people worldwide at the end of the last quarter, including more than 50,000 in Seattle. Additionally, more than 100 out-of-town tech companies have set up shop in the Seattle area. A few, like Facebook and Google, have become some of the top tech employers in the city.

The report finds that high tech jobs focused on software and services employed 145,356 people in Seattle in 2016, or about 38.1 percent of office jobs. Tech companies in Seattle have a strong talent pool to pull from, as 45 percent of residents have a bachelor’s degree or higher.

Another area where Seattle stands alone is in its frothy office market. The report listed significant tech leases for each market, and F5 Network’s move to lease the entirety of a new downtown Seattle office tower was the biggest deal spotlighted in the report. The report did not mention two big leases signed by Amazon for a striking new tower, and a large swath of space above the downtown Macy’s.

Despite all these tech office deals, rents for tenants aren’t rising as fast as other markets. Seattle came in 10th in office rent growth. The average asking rent for office space of $32.45 per square foot is less than half of San Francisco’s at $72.90. Developers are active here: the 7 million square feet of new office space under construction in Seattle trails only New York and Silicon Valley.

All these figures point to Seattle as a more established tech market than some of the other top finishers in the report. In Pittsburgh, for example, tech accounted for a slightly higher percentage of new office jobs at 95 percent. But that only translated to 4,400 new jobs, or about one-sixth of Seattle’s new tech jobs over the two-year period.

It also shows that the San Francisco Bay Area is still the top tech region in the country. The report separates San Francisco and Silicon Valley, diluting their numbers. Combined, the two markets accounted for more than 41,000 tech jobs over the two-year period, with more than 15 million square feet of office space under construction.


~Nat Levy, Geekwire

From Boeing to Microsoft, Amazon to Starbucks, how Seattle’s business innovation has shaped the world

Seattle businesses attract creatives with an irresistible combination of great jobs, outdoor amenities and a progressive workplace culture that now includes a $15-an-hour minimum wage. Great companies are the driving engine that grew Seattle into a booming creative mecca, and their forward-thinking CEOs – especially Microsoft’s Bill Gates and Amazon’s Jeff Bezos – are the city’s rock stars.

Here’s a look at how the most important Seattle companies grew, and how they continue to shape the city’s future.

The builders

Before The Boeing Co, company historian Michael Lombardi notes, Seattle was a logging hamlet. William E Boeing changed that when he founded his commercial aircraft company here in 1916, just two years after the first ever commercial flight. “Seattle and Boeing grew up together,” Lombardi says. As Boeing’s fortunes rose and fell, so did the city’s.

During the early 1970s, Boeing saw a big government contract end, and Seattle unemployment shot to 17%. One wag posted a billboard that read, “Will the last person leaving Seattle – turn out the lights.”

Boeing bounced back, thanks to its diversity. While most aircraft firms specialize in commercial planes, spacecraft or military projects, Boeing pursues all three, Lombardi notes. As China and other Asian nations visited to purchase planes, Seattle became a more international city. Today, Boeing has roughly 80,000 local employees, and the 20 to 50-year production timeframe for airplane models means Boeing brings economic stability to the region, he notes.

Another constant presence is 116-year-old Nordstrom. The chain grew to nearly 350 stores by making shopping special, with live piano music, in-store restaurants and legendary sales staff, who meticulously note and remember customers’ preferences.

“Nordstrom made Seattle the customer-service capital of the United States,” says Robert Spector, a longtime local business observer who has authored books on Amazon and Nordstrom, including The Nordstrom Way to Customer Experience Excellence (Wiley Sept 2017).

Ever an innovator, Nordstrom jumped into e-commerce ahead of competitors, in 1998. Last year, the company brought its store experience and website together with a Reserve & Try feature, which lets customers choose items online to try on at their local store.

A top Seattle style-setter, Nordstrom added more than a dozen exclusive labels to its remodeled downtown flagship store last year, including Louis Vuitton and Beyoncé’s Ivy Park. Nordstrom is one of the last department store brands to retain leaders from the founding family, notes author Spector. He says their success stems from the Nordstroms’ habit of making each new generation start on the sales floor.

While Nordstrom gave Seattle fashion flair, REI served rugged outdoor explorers. Founded in 1938, the company’s flagship store on Seattle’s Capitol Hill was a popular early tourist attraction for its then-rare selection of affordable mountaineering gear, says Alex Thompson, REI’s vice-president for brand stewardship and impact.

Today, REI doesn’t just sell gear – it’s about getting people outside, offering more than 250,000 outdoor classes annually, Thompson notes. The company’s new Force of Nature initiative facilitates women-led outdoor events, and is prompting gear-makers to design with women in mind.

With its co-op ownership model and commitment to sustainability, REI is about more than profits. An example: after opening a zero water and energy-use distribution center in the Arizona desert last year, the company made the plans public, so others could use them. Spreading the gospel, many former REI execs now lead other Seattle outdoor organizations such as The Mountaineers, while former chief executive officer Sally Jewell served as Secretary of the US Department of the Interior.

“There’s a strong correlation between working at REI and going off to do great things,” says Thompson.

The innovators

Seattle’s over-dependence on Boeing jobs ended in the 1980s, after Bill Gates and Paul Allen brought their software startup to town. When Microsoft Windows was introduced in 1983, it became an instant hit, ushering in the age of the personal computer. In 1986, the company settled into its Redmond campus, which now employs more than 46,000 people. Along the way, the ‘Microsoft effect’ brought affluence to the Eastside, which grew its own downtown in Bellevue.

“When I arrived in Seattle in the late 1970s, before Microsoft took off, it was still just a big town,” says Spector. “Now it’s a medium-sized city.”

One thing this chilly city loves is coffee. Howard Schultz saw Seattle’s potential for an Italian-style coffeehouse scene and bought the original Starbucks store in Seattle’s Pike Place Market in 1987. Suddenly, Seattleites couldn’t get to work without a $5 latte.

“I think the brilliance of Howard Schultz,” says MOHAI’s Garfield, “was that he took a prosaic item – regular coffee – and made it an essential luxury, and something that people are passionate about.”

While Starbucks exported Seattle coffee culture to more than 22,000 locations around the globe, the company also raised the bar on employee benefits. The chain offered full health benefits to part-timers in 1988, and added college scholarships in 2015. From recycled cups to ethically sourced beans, Starbucks strives to do well by doing good.

The disruptors

As the 21st century neared, a new breed of entrepreneurs arrived in Seattle. Leading the charge was former Wall Street internet project manager Jeff Bezos, who thought consumers would buy products on the internet.

From its first book sale in 1995, Amazon.com touched off an online shopping revolution. Locally, Microsoft executive Rich Barton would follow suit, spinning travel-booking website Expedia out of Microsoft in 1999, and co-founding real-estate site Zillow in 2006.

Amazon would also foster a new, results-oriented corporate culture that became the norm for local tech startups. Sure, kayak to work, bring your dog, and work when you want – as long as your projects get done. “My team set their own schedule,” says corporate communications manager Sam Kennedy.

It must be working: today, while many traditional retailers struggle, Amazon is hiring 100,000 more workers nationally. Locally, its hiring boom is single-handedly spiking home prices.

As Microsoft reshaped Seattle’s Eastside, so Amazon’s sprawling campus is transforming the once-industrial South Lake Union neighborhood north-east of downtown. Google is building a major branch office nearby, and restaurants, condos and shops have sprouted.

In all, Seattle’s companies bring the practical, progressive lifestyle not just to the city but to the world, says MOHAI’s Garfield. Visitors fly home in Boeing planes, on which they’re served Starbucks coffee. Often, they’re wearing Nordstrom dresses or hauling an REI backpack, while they shop on Amazon or use Microsoft Office on their laptops.

“Every iconic Seattle company is about our lifestyle, ethic and culture,” he says. “It’s hard to think of another US city where you can say that.”

~Carol Tice, The Drum