CBRE Group, Inc.’s latest research report, “Scoring Tech Talent,” ranked Washington, D.C. at #2 and Baltimore at #10 on the annual list of  top markets for tech talent in the U.S. and Canadian. . . The findings rank 50 markets on their ability to attract and grow tech talent; this is the second year in a row where Washington, D.C. placed in the top five.

Furthering the region’s clout, Washington, D.C. took the top spot for the highest millennial population increase, with 27.1% growth since 2009. Graduates in the District earn 15,000 tech-related degrees annually, creating one of the highest educational achievement rates in the country.

In addition to being in the top ten on the Tech Talent Scorecard, Baltimore also ranked as a top “Momentum Market” for the volume of growth in the tech labor pool, coming in only behind the San Francisco Bay Area. With its proximity to D.C. and the rise in local, government-fueled tech jobs, Baltimore has increased its technology workforce by more than 60% over the last five years.

“The Washington, D.C.- Baltimore corridor has become one of the most concentrated regions in the U.S. for niches such as cybersecurity talent,” said Dominic Orfitelli, Senior Vice President, CBRE. “The volume of millenials moving to the area to fill those open positions and the growth of cybersecurity companies is driving commercial real estate in and around the region.”

Influential Factors Shaping National Tech Markets Today

The CBRE report highlighted several influential factors shaping both large and small tech markets.

·         Educational Attainment/Tech Degrees: Nearly 70% of the top 50 tech talent markets have an educational attainment rate above the U.S. average (30%). More relevant to this study is the number of graduates who have earned technology degrees.

The Washington, D.C. region including Baltimore produced 59,980 tech graduates between 2010 and 2014 and added 73,440 tech jobs between 2011 and 2015, for a net gain of 13,460, second only to New York. Other leading markets for tech degrees completed include Los Angeles, Chicago, Phoenix, Boston, the San Francisco Bay Area, Atlanta, Columbus and Detroit.

·         Cost of Living: According to Moody’s Analytics, 36 of the top 50 tech talent markets have a cost of living above the U.S. national average. CBRE compared the average apartment rent to the average tech-worker wage in each market and found that even in the most expensive markets, tech wages are able to cover the high cost of living (using the affordability benchmark that allocates 30% of income to housing).

Coming in at #13 in the wage-to-rent ratio rankings, Washington, D.C. has a lower ratio of 18.7% compared to the cities of New York, Los Angeles and Miami. The average annual rent in Washington, D.C. was $19,755 and the average annual wage for someone in the technology industry was $105,608. Even though the rent-to-wage ratio was less than the cities of New York, Los Angeles and Miami, it’s tech employees made more annually than Los Angeles and Miami residents, but had a higher cost of living at 24% above the U.S. average. As a result, Washington, D.C. has a wider gap in regards to the amount of money tech employees make and how much they pay in rent in comparison to Miami, where the average rent is lower, but so is the salary. Therefore, the wage-to-rent ratio is higher in Miami because the average tech salaries are lower.

Baltimore came in at #31 on the list with a lower wage-to-rent ratio of 15.5% with the average annual rent costing $15,325 and the average annual wage at $98,932. The cost of living in Baltimore was also above the U.S. average by roughly 10%.

·         Presence of Millennials: The presence of higher educational institutions help markets to attract high concentrations of millennials.

Six large tech markets increased their millennial population by more than 10% since 2009, with Washington, D.C. growing the fastest at 27.1%, with 27,700 millennials moving to the city, which is a 47% total growth rate.

Impact on Office Markets

High-tech companies’ share of major leasing activity increased from 11% in 2011 to 18% in 2015 nationwide—the largest single share of any industry. Many tech-talent markets, especially those with high concentrations or clusters of tech companies, have seen rising rents and declining vacancies as a result. Significant demand for office space in top markets that have added tens of thousands of workers during the past five years raised rents to their highest levels and pushed down vacancy rates to their lowest.

Rankings for the Tech Talent Scorecard are determined based on 13 unique metrics. They include tech talent supply, growth, concentration, cost, completed tech degrees, industry outlook for job growth and market outlook for both office and apartment rent cost growth.

To view the interactive report, please visit http://www.cbre.us/research/2016-U-S-Reports/Pages/2016-Scoring-Tech-Talent.aspx?utm_source=cbre&utm_medium=display&utm_campaign=2016-06-scoring-tech-talent .

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 2015 revenue). The Company has more than 70,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 400 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