There’s been a lot of talk about a mass exodus from well-known tech cities, with talented workers and entrepreneurs ditching San Francisco’s sky-high rents and fleeing New York City’s shoebox apartments. Regardless of whether the COVID-19 pandemic will actually bring the demise of these cities, there is one tech hub that has only continued its upward streak over the past several months: Northern Virginia (also known as NOVA), the region just outside of Washington, D.C.
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The West Coast has been leading the tech expansion cycle with social media, e-commerce and apps, but a shift is underway. As the tech cycle diversifies into more complex fields like cybersecurity, cloud computing and predictive analytics, Northern Virginia is taking the lead.
What’s going on out west?
The West Coast has seen tremendous tech growth this business cycle. According to JLL research, Seattle, Silicon Valley and San Francisco, three of the largest West Coast markets, reached a combined 44.8 million square feet of net occupancy growth, leaving limited quality space available and causing a spike in rental rates. And while the tech boom has wiped out unemployment across the West Coast, tech giants are facing severe talent shortages, making it difficult for them to maintain this rapid rate of growth.
Along with talent shortage issues out west, big tech is diversifying into more complex sub-sectors. As tech giants look to grow in these fields, Northern Virginia is an obvious choice. NoVa’s economy has been directly tied to government contracts historically, and thanks to federal spending priorities this decade in cloud computing and cybertechnology, it has quietly emerged as a hub for these new fields.
The region’s concentration of federal agencies is a major draw for tech firms. JLL research shows that companies in the Dulles tech corridor already have 37 percent share of all federal technology contracts, and as federal spending on cloud computing and cybersecurity increases so will the region’s portion of federal deals, says Kelly Katz, executive managing director, JLL.
In addition to federal investment, Northern Virginia is a massive magnet for technology companies because of its highly skilled workforce. “The region offers one of the nation’s strongest and deepest tech talent pools,” says Katz. With government contractor employers who already specialize in technology tools and more than 60 nearby higher education institutions filling the pool with qualified employees, “Northern Virginia will likely see a strong uptick in demand looking to capitalize on this talent.”
The region has already seen this with startups like Verodin, a firm that created the first and only platform built to assess whether a company’s cybersecurity tools are doing their job. Verodin began operating in Reston, Virginia, while most of its employees were based in California and Texas. When it came time to plant their headquarters flag, they chose Northern Virginia because of its security talent and proximity to government agencies. “Our business relies on excellent talent and so attracting world class talent is critical,” says Ben Cianciaruso, chief operating officer at Verodin.
Today, Northern Virginia has almost 70 percent of the 28 million square feet of occupied technology office space in the Washington, D.C.-Maryland-Northern Virginia market. And more development is on the horizon. “Looking forward, 73 percent of future occupancy gains will be driven by tech,” Katz says, “with neighborhoods west of Tysons Corner offering the best proximity to (tech) talent, primarily along the Toll Road and into Loudoun County.”
While Northern Virginia has prominent tech specialties, there is plenty of variety within the tech market. “What excites us is the diversity of employers,” Katz says. “It leads to more stability when you’re not depending on one type.”
For more information about Northern Virginia and what you should know for 2019, download JLL’s 12 stories forecast here.
Day in and day out, JLL partners with businesses of all shapes, sizes and cultures to help them realize their workplace ambitions. What’s your story? Email us at MidAtlanticAmbitions@am.jll.com to start the conversation.
…And why tech workers are finding home here, tooAs far as tech hubs go, Northern Virginia is livable. Your neighbors and colleagues make up a diverse community: in NOVA, as compared to Silicon Valley, women are twice as likely and Black residents are five times as likely to work in tech. In Fairfax County — NOVA’s largest county, home to more people than D.C. itself — nearly one in three residents was born outside of the US, making it one of the nation’s most ethnically diverse places. When it comes to feeling at home somewhere, the company you keep is important, but so is the place you call your own. In Northern Virginia, there are endless combinations of neighborhoods and housing options to find a home that matches your lifestyle. From the high rises of Arlington within eyeshot of the National Mall, to the planned communities of Fairfax County just off the Silver Line, to the wide open spaces of Fauquier County at the foothills of the Blue Ridge Mountains, NOVA is home to regions within the region – each with a distinct personality, but all within an hour of the nation’s capital. If family is a factor, you won’t have to look further than your local public school district to benefit from some of the best education in the nation. Notably, Fairfax County Public Schools — the country’s 10th largest school system — consistently ranks among the top districts in the US. It’s home to Thomas Jefferson High School for Science and Technology, the number one public high school according to US News & World Report. Perhaps the best thing about Northern Virginia right now is that it’s ready to welcome you with open arms. So much so that it has set up a comprehensive website for finding jobs around the region, and a series of virtual career fairs to help job seekers connect with companies that are hiring. All that’s left is for you to make the leap – NOVA is ready when you are.
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The year 2020 was that of the U-Haul, the Craigslist ad, the broken lease agreement on your 500-square-foot downtown apartment – Americans were on the move. About a fifth of U.S. adults moved due to COVID-19 or know someone who did, and that number is even higher among the nation’s young adults (ages 18-29), at 37%. Taking geography into account, the cities that lost the most residents during the pandemic were tech industry hubs like San Francisco and New York.The pandemic that spurred this uptick in migration is not yet in the rearview mirror, and as COVID continues to make us rethink everything from our grocery budgets to the value of a backyard, there’s a case to be made about other tech hubs that offer similarly high-paying jobs but with a key differentiator: livability. A tech sector hub should be somewhere to thrive not only in your career, but also in your life. Northern Virginia (or NOVA, for short) is one place that has you covered on both fronts. Located just across the river from Washington, D.C., the region doesn’t scream “tech town” like Silicon Valley or Seattle, but in that way it’s the industry’s best-kept secret. The D.C. Metro area is the most concentrated tech talent market in the country after San Francisco, with tech positions representing 8.3 percent of all jobs in the region (second to the Bay Area’s 10.5%). In Northern Virginia’s largest county, Fairfax, one out of every four jobs is tech-related. On the heels of Amazon’s 2018 decision to open its HQ2 in NOVA, tech companies in the region are hiring by the thousands, and COVID has not slowed them down. But beyond the jobs, here are some key factors that draw tech workers to Northern Virginia.