The tech industry continues to be the largest consumer of office space across the country, a similar trend we see in Phoenix as well. Companies are gobbling up talent and large blocks where they can get them, and driving economic growth from San Francisco to New York and everywhere in between. How can you best navigate your real estate needs within this growing industry?
In this six-week series, I’ll explore the top six trends that are impacting the estate decisions of technology companies across the country, and how they apply to the Metro Phoenix market. Knowing and understanding these trends will give you a leg up as you plan your real estate strategy.
Trend 1: Talent is the target
With more than seven years of economic expansion, competition for the brightest people is at an all-time high with no signs of slowing. Job openings hit a new record in October at 6.2 million. However, low unemployment (4.2 percent), paired with low labor force participation (63.1 percent), are hurdles for the economy at large.
Because of this activity, JLL’s national research team expects more secondary and tertiary markets to be the beneficiary of corporate expansions. Phoenix is indeed one of those beneficiaries.
Phoenix is one of the fastest-growing tech markets in the country. We’ve experienced a whopping 48 percent increase in people employed in tech occupations over the last five years, adding nearly 4,000 new tech employees in the previous year alone. This growth has been spurred by a lot of organic growth amongst local tech companies, as well as activity from corporate expansions from other markets. Many of the companies expanding to Phoenix are coming from primary markets and are locating support operations here.
As the battle for talent continues to heat up, Phoenix employers are getting increasingly more creative in their recruitment and retention efforts, using cool office space and robust incentive packages as key influencers. The focus is developing cool and different work environments to make employees happy. Common office characteristics we see in Phoenix are:
A combination of indoor and outdoor space
Multiple options for employees to move around the office during the day and decide where and how they want to work, rather than be tied to a desk
Unique break areas, where employees can relax and come together
Employee freebies such as snacks and coffee bars
These days, the office isn’t just an office anymore. Any tech company hoping to compete in the War for Talent must think about what their employees want and how to build them a comfortable environment where they can thrive.