CBRE Research report: Tech talent clustering is a growing driver of demand for office space in both large and small markets across U.S.

Emerging tech markets Oklahoma City and Nashville stand out as top “momentum markets,” posting tech talent growth rates that rival more established markets like San Francisco

Los Angeles, 2015-4-14 — /EPR Retail News/ — Tech talent clustering is a growing driver of demand for office space in both large and small markets across the U.S., according to a new CBRE Research report, “Scoring Tech Talent,” which ranks 50 U.S. markets according to their ability to attract and grow tech talent.

While established tech markets like San Francisco, Washington, D.C., and Seattle dominated the top spots on the “Tech Talent Scorecard,” many smaller, up-and-coming markets stood out as top “momentum markets” based on tech talent growth rates. Oklahoma City and Nashville had tech talent growth rates of 39 percent between 2010 and 2013, higher than Seattle (38 percent) and just below that of San Francisco (44 percent) and Baltimore (42 percent). Portland, OR, and Charlotte both saw tech talent growth rates of 28 percent, outpacing well-known tech markets like Austin (26.5 percent), Silicon Valley (20.8 percent) and Los Angeles (13.6 percent).

“Tech talent growth rates are the best indicator of labor pool momentum and it’s easily quantifiable to identify the markets where demand for tech workers has surged,” said Colin Yasukochi​, director of research and analysis for CBRE. “Tech talent growth, primarily within the high-tech industry, has recently been the top driver of office leasing activity in the U.S.”

Though tech talent  comprises only 3.4 percent of the total U.S. workforce (4.4 million workers), the high-tech industry accounted for more major U.S. office leasing activity  than any sector in both 2013 (13.6 percent) and 2014 (19.0 percent), according to the CBRE report.

“For the past two years, the high-tech industry has not only spurred the economy as a whole, but it has been the top driver of commercial office activity, influencing rents and vacancy in major markets across the U.S.,” said John Frager, executive managing director of CBRE’s Tech and Media Practice. “The report showed Manhattan with the highest office rent and San Francisco with the lowest vacancy rate of the 50 tech talent markets.”

The top 10 large markets on the Tech Talent Scorecard (identified as markets with a talent pool above 50,000 tech professionals) were:

1. Silicon Valley, CA

2. Washington, D.C.

3. San Francisco, CA

4. San Francisco Peninsula, CA

5. New York, NY

6. Seattle, WA

7. Boston, MA

8. Baltimore, MD

9. Austin, TX

10. Atlanta, GA

Dallas, Orange County, Chicago and Raleigh-Durham took the 11, 12, 13 and 14 spots on the list before a small market—defined as a market with a tech talent labor pool of less than 50,000—made its way onto the list.  The top-ranked small markets included:

15.  Oakland, CA

16.  Edison, NJ

23.  Columbus, OH

25.  Salt Lake City, UT

26.  Portland, OR

27.  Newark, NJ

29.  Long Island, NY

30.  Kansas City, MO

31.  Charlotte, NC

33.  Cincinnati, OH

The report also looked at which markets present the greatest cost for occupiers based on wages paid to employees and rent paid for office space. CBRE Research combined these two costs for a “typical” 500-person tech firm needing 75,000 sq. ft. of office space for each market and found that, for large markets, Silicon Valley is the highest cost and Detroit is the lowest cost. For smaller markets, Oakland is the highest cost and Oklahoma City is the lowest cost.

The CBRE report also identified various characteristics that are shared by tech talent markets:

  • Gender Diversity:  The U.S. average breakdown for tech talent occupations is 76.2 percent male and 23.8 percent female. Half of tech talent markets have a greater concentration of women in these occupations when compared with the U.S. average, but the numbers are still imbalanced. The most gender-diverse tech talent market is Philadelphia, where females occupy 31 percent of tech talent occupations.
  • Education: Nearly 75 percent of the top 50 tech talent markets have an educational attainment rate above the national average. New York, Washington, D.C., and Los Angeles topped the list for the most tech degrees completed in a two-year period.  When it comes to small markets, Columbus was the standout in this area, besting large markets like Dallas/Ft. Worth and Philadelphia in the number of tech degrees completed in the last two years. These numbers are an indication of future tech talent growth.
  • Millennials: The presence of millennials in the workforce has contributed to the growth of tech talent labor pools. In Boston, millennials make up more than 25 percent of the total population. In Washington, D.C., the millennial population has increased by 26.5 percent since 2009.

“Though highly concentrated within the high-tech services industry, tech talent is not limited to any one type of company and can be found across all industry sectors. In fact, more than 60 percent of tech talent jobs are located outside of the core high-tech industry and these workers help generate innovation and advances that can boost the whole economy, including the commercial real estate market,” said Yasukochi.

To view the interactive report, please visit www.cbre.com/techtalent2015.

About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2014 revenue).  The Company has more than 52,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 370 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website atwww.cbre.com.

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CBRE Research: lower oil prices will have effects across Houston commercial real estate market, but fears of broad-based decline are overblown

CBRE report shows impact will vary by property type, with the retail sector most insulated and the office market most exposed

​Los Angeles, 2015-3-12 — /EPR Retail News/ — Lower oil prices will have effects across the Houston commercial real estate market, but fears of broad-based decline are overblown, according to a new report from CBRE Research. The report finds that the degree of impact will vary based on the magnitude of change in employment, and by property type, with expected impact to the retail sector being negligible and the office sector, modestly negative.

“The outlook for Houston commercial real estate is less positive than a year ago, and certain submarkets and property sectors can expect to see at least temporary shortfalls in demand,” said Spencer Levy, Americas Head of Research, CBRE. “However, we expect oil prices to slowly drift up over the next two or three years. That, plus strong growth in the U.S. economy will limit the impact of the recent drop in prices on the market.”

Much has been written in the popular, economic and real estate press about the challenges the Houston economy may face due to low oil prices. However, in commercial real estate the story is more nuanced, with a number of considerations, including:

  • The U.S. economy will benefit on net from lower oil prices, with the positive impact to consumer spending potentially boosting real GDP growth by up to 0.7 percent in 2015, according to Moody’s Analytics.
  • Houston’s economy is entering this period from a position of strength, having gained four new jobs since 2009 for each one lost during the recession while experiencing income growth about the national average.
  • While energy is a key industry in the Houston economy, the sector has also diversified across the energy industry’s three segments – upstream, midstream and downstream – and each is impacted by lower oil prices in different ways. Most notably, the negative impacts to exploration and production (upstream) will be partially offset by positive impacts on petrochemical manufacturing (downstream).
  • Retail is best positioned among the property types because the spending of Houstonians will benefit from lower gasoline prices, the occupancy rate is historically high and construction of new shops has been uniquely constrained in this cycle.
  • The office market is most exposed due to the Houston’s concentration of upstream energy headquarters and major operations as well as the amount of new supply coming on line through 2017.
  • Impacts to industrial and multifamily will likely be limited to slower rent growth. Both sectors enter this period with strong occupancy and face offsets to weakness in the upstream segment from downstream expansion and, for multifamily, support for continued demand from a tight single-family market.

“Ultimately, the fall in oil prices results in winners as well as losers. The winners are broadly spread, the losers are usually in specific locations” added Mr. Levy. “Investors are acknowledging the changing global industry dynamics, including the U.S. push for energy independence, the decline in OPEC’s power and growing political support for the international trade of domestic liquefied natural gas (LNG) and crude oil – all of which could potentially have positive implications for Houston and the U.S. energy sector.”

CBRE Research’s global perspective is that most of the oil-producing economies face a tough 18 months or so. “Russia, for instance, is expected to see its GDP decline in 2015 by 5 to 8 percent. However, led by the U.S., overall growth in the world economy is expected to pick up in 2015 and 2016. This will provide some support for oil prices, which we expect to drift up slowly from this point onwards as some production capacity comes out of the market,” said Richard Barkham, Global Chief Economist, CBRE.

“It was always clear that the beneficial effect, on consumer spending for instance, would only show through in the medium term. The pain would be near term and localized in energy-centric markets, such as Houston and Calgary. Houston can at least look forward to some offset for falling energy-related investment from revived domestic demand growth across the whole of the U.S. The same cannot be said for Russia, Venezuela and Nigeria,” added Mr. Barkham.

Note to editors/journalists: To speak with a CBRE expert or obtain a copy of the report, please email robert.mcgrath@cbre.com or corey.mirman@cbre.com.

About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2014 revenue).  The Company has more than 52,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 370 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.

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Corey Mirman
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CBRE research: Canada is the unrivaled global investor in U.S. real estate

Norway, China, Japan and Germany Major Players in U.S. Market

​Los Angeles, 2015-2-6 — /EPR Retail News/ — Canada is the unrivaled global investor in U.S. real estate with nearly $10 billion of direct investments in 2014—ahead of Norway, China, Japan and Germany—according to the latest research from CBRE.

Global direct investment in U.S. real estate totaled $41 billion in 2014—about 11% of all investment in U.S. property assets*. This represents a 6% increase in global investment when compared to 2013.

Canada was the lead global buyer of U.S. real estate last year with 26% of direct foreign investment—$9.7 billion. Canadian investors have already transacted a significant $2.75 billion in U.S. real estate as of mid-January 2015. Canadian real estate investment in the U.S. was one of the largest cross-border capital flows in the world in 2014 after U.S.-to-U.K. and Hong Kong-to-China capital flows.

Microsoft Word - Press Release - Canadian Foreign Investment in

Norway was the second largest global investor in U.S. real estate in 2014 with 11% of direct foreign investment—$4.4 billion and a 120% increase year-over-year. China and Japan reached total investment levels in the U.S. of $3.8 billion (+6%) and $3.5 billion (+397%), respectively, each representing 9% of the global total. German buyers transacted $2.9 billion (+5%) in U.S. real estate, representing 7% of the global total.

“While we have seen rapidly rising Chinese global investment and oil-rich countries in the Middle East or Norway increasing their allocations to global real estate, Canadian buyers continue to dominate foreign investment in the U.S. and should remain on the radar screens of American investors and owners of U.S. real estate,” said Chris Ludeman, Global President, CBRE Capital Markets.

“Canadians, other global investors and Americans share the same challenge—finding attractive opportunities with reasonable pricing that can produce a favorable risk-adjusted return. That said, we expect the investment climate to remain brisk and U.S. volumes will continue rising in 2015.”

The U.S. is by far the largest destination for Canadian global capital. Of the $22 billion that Canada invested outside of its borders in 2014, 44% went to the U.S. The next highest shares—17% and 14%—went to Australia and the U.K., respectively. It should be noted that the U.S. market share of Canadian global investment dropped below its 2007-14 average of 48% in 2014.

“Canadian investors find U.S. real estate attractive for many of the same reasons that other countries do. The U.S. offers opportunities for value creation, healthy cash flows and favorable risk-adjusted returns,” said Ross Moore, CBRE’s Director of Research for Canada. “The level of Canadian investment is highly correlated with the health of the American economy and exchange rates, but the overriding motivation is that Canadian institutional investors need to look beyond their borders to find product and achieve greater diversification.”

Canadian investment is more geographically widespread across the U.S. than other global capital. This should not be surprising given the magnitude of Canadian investment, its high degree of familiarity with U.S. markets beyond the gateway cities, and the relatively low cost and time commitment for Canadian investment professionals to travel to U.S. markets.

For all property types combined, as with total global capital flows into the U.S., New York is the leading destination for Canadian real estate capital, followed by Boston and Broward County in Florida, which made the list due to a significant hotel acquisition. Seattle is somewhat unusual for global capital, but not unusual for Canadian capital given its proximity to Canada and, in particular, Vancouver.

Microsoft Word - Press Release - Canadian Foreign Investment in

* Preliminary figure and may be revised upward as final 2014 closings are recorded. These statistics come from Real Capital Analytics’ transactional database, which includes commercial real estate transactions exceeding $2.5 million. The figures include neither entity-level acquisitions nor pending or under-contract transactions.​

About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2013 revenue). The Company has approximately 44,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through approximately 350 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com

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CBRE research: Hong Kong, New York, Paris, London and Tokyo retained their positions as the world’s most expensive high-street retail destinations in Q3 2014

Hong Kong Remains World’s Most Expensive Retail Market by Substantial Margin

​Los Angeles, 2014-12-8 — /EPR Retail News/ — Hong Kong, New York, Paris, London and Tokyo retained their positions as the world’s most expensive high-street retail destinations in Q3 2014, according to new research from global property advisor CBRE Group, Inc.

CBRE’s quarterly ranking of the world’s prime global retail markets saw little change in Q3 2014, with global and hot-growth markets continuing to lead the list. Retailers across all markets continue to target high-end shopping areas and international tourists.

“Even with the somewhat gloomy economic headlines, consumer demand is reasonably firm in most markets,” said Richard Barkham, Global Chief Economist, CBRE. “We can expect to see a continuation of the post-crisis pattern of periods of optimism followed by periods of pessimism. The Americas will see stronger growth than the Eurozone, as the latter has been constrained by restructuring in the banking sector as well as overly tight fiscal and monetary policy. Asia Pacific will record slightly lower growth in 2014 over 2013, but is still expected to outpace the other two regions by a considerable margin.”

Hong Kong (US$4,327 per sq. ft. per annum) maintained a wide lead over the number-two market, New York (US$3,570 per sq. ft. per annum)—where prime rent along Fifth Avenue is at record levels. Rents in Hong Kong remained stable compared to Q2 2014.

The “Occupy Central” protest, which began late in the third quarter, has not yet materially impacted retail rents in Hong Kong,” said Henry Chin, Head of Research, Asia Pacific, CBRE. “We did see lower shopper footfall in affected areas in October; however, the Christmas shopping season will provide some support to retail sales in the final quarter.”

A large rental spread also exists between New York and the two leading European markets: Paris (US$1,331per sq. ft. per annum) and London (US$1,328 per sq. ft. per annum). The gap between the top four markets and the rest of the top 10 widens significantly.

Q3GlobalRentsTable.jpg

While the top four cities continue to hold their leading positions, there was some movement lower in the top 10 rankings. Rents rose in Tokyo (US$1,076 per sq. ft. per annum), and fell in Zurich ($895 per sq. ft. per annum) and Sydney (US$730 per sq. ft. per annum), resulting in the cities changing positions this quarter.

In Q3 2014, Tokyo continued to lead rental growth in Asia Pacific, with the continued lack of space in major high-street retail locations pushing up retail rents 7.7 percent quarter-over-quarter. Strong rental growth was also recorded in a number of emerging markets in the region, particularly in India and Vietnam, reflecting the recent resumption of structural economic reforms following the general lack of progress over the past few years. Highlights included a strong 5.9 percent quarter-over-quarter rental growth in Ho Chi Minh City and a 4.0% quarter-over-quarter rental growth in Mumbai.

Retailer demand for prime locations in major cities across EMEA remained firm, but rental growth has tailed off, leaving most markets flat in Q3 2014. Hamburg (up 6.5 percent quarter-over-quarter) and Munich (up 5.6 percent quarter-over-quarter) were among the few markets to record growth, reflecting the fact that, despite the recent economic headlines, domestic consumption in Germany remains firm.

In the U.S., four of the 12 prime retail corridors tracked by CBRE Research saw quarter-over-quarter increases in prime rents during Q3 2014. Prime asking rents along Rodeo Drive in Los Angeles (US$640 per sq. ft. per annum) continue to be the highest in the U.S. outside of Manhattan, and are expected to record further increases over the remainder of 2014, as there continues to be a lack of available space. Miami (up 3.2 percent quarter-over-quarter), Washington, D.C. (up 2.2 percent quarter-over-quarter), and New York (up 2.0 percent quarter-over-quarter) also reported increasing in prime asking rents in Q3 2014. In Canada, high-street rents were unchanged in Montreal, Vancouver and Toronto, and have remained at their current level since Q4 2013.

Note to editors/journalists:  To speak with a CBRE retail expert please email robert.mcgrath@cbre.com orcorey.mirman@cbre.com

About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2013 revenue).  The Company has approximately 44,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through approximately 350 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.

For Further Information:

Robert Mcgrath
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T +1 212 9848267
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Corey Mirman
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