As result, we’re seeing more and more headlines—certainly warranted—and having many more discussions on this rising trend. Now as a firm, not only are we observing and tracking them, but as professionals we are also assisting companies in determining the right course of strategic action to take, as well as identifying the appropriate space(s) and locations to meet their current and future needs.
To better help examine the former expansion trend, Cushman & Wakefield’s research team recently published an infographic entitled The Great Tech Migration. Since January 2010, 58 of the 89 San Francisco Bay Area headquartered (100,000 SF+) tech and life science companies have taken 30.4 MSF of office space in other cities in the U.S. Robert Sammons, Cushman & Wakefield’s Senior Director of Research, says, “What is important to emphasize here, however, is that while the footprint has expanded nationally, growth has also continued in the Bay Area. The same tech and life science companies committed to 55 MSF and now control over 103 MSF of office and R&D space.
For companies today to be successful and perform at their optimal capability, they need to be able to attract the best and appropriately-fitting talent, and so we are seeing more and more companies, namely tech-oriented, position themselves around such talent pools. Interestingly, what was once considered the exception as it pertains to companies having multi-market presence, is now considered the norm.
Now with regard to the latter trend, in which companies, both large and small, are flat out moving away from the Bay Area—the most prominent sector influencing such trend stemming from Financial Services and Fintech while chief among those reasons relating to cost (both business and living) as well as lack of available space— tends to give some a sense of unease here at home. However, while expanding elsewhere rapidly, tech growth is still far from over in the Bay Area, as proven by both venture capital funding for startups based in the Bay Area, as well as our region’s leasing activity statistics.
A company’s determination for expansion and migration is a much more technical process than most may realize. Such critical decisions are made following extensive periods of deep analyses and due diligence, and so the migratory trends we see today are often actually the fruition of months or even years of prior evaluation—whether examining site selection, labor and employee analytics, cost analysis, tax implications and other important factors, including aligning with corporate growth projections and syncing with the market cycle.
Notably, several companies comprising the statistics used in Cushman & Wakefield’s tech migration study are also our clients. And so therefore, we can attest to how important it is that companies of any size partner with the right advisor when expanding or even relocating within the Bay Area or into another market, given the countless variables that need to be taken into account in these strategic efforts.