February 20, 2017
By: Chris Crow, Senior Vice President, JLL
The world’s foremost innovation ecosystem continues to flourish, attract talent and capital from across the globe, a fact confirmed by Silicon Valley’s Top 3 place in this year’s JLL City Momentum Index.
Only Bangalore, India and Ho Chi Minh City, Vietnam, scored higher in JLL’s analysis of 42 variables such as economic output, population, corporate headquarters, commercial real estate construction and transactions, environmental quality and infrastructure.
New construction maintains pace
According to JLL’s own data, more than 7.9 million square feet of new commercial office space is under construction throughout the Valley which includes several major owner user campuses.
Developers also continue to make big bets on future growth in the technology sector kicking off speculative new office projects, plus something that is a new trend unseen in previous decades — speculative industrial and high tech manufacturing developments.
It is no wonder that Silicon Valley consistently leads all North American markets in terms of both its short and long-term economic momentum.
High real estate and labor costs coupled with M&A, increasing sublease space availability and a plethora of new supply coming online may disrupt the Valley’s trend of strong year-over-year growth moving into 2018.
Also, depending on how and when they are resolved, broad political hurdles such as immigration could put a damper on the region’s growth.
For the time being, however, Silicon Valley continues to outshine even its local rivals. San Francisco placed #21 in JLL’s global index and sixth among North American cities, behind Silicon Valley (#3); Austin (#7); Boston (#9); New York (#14); Seattle (#20).
Yet, having two major markets included in the Global Top 30 Most Dynamic Cities clearly places Northern California among the most productive economies and regions in the world and few would bet against Silicon Valley or San Francisco maintaining their position for the foreseeable future.
About the author
Chris is a member of the JLL Tenant Representation team in Silicon Valley. His core competency is advising companies of all growth stages and developing strategic occupancy strategies that utilize his firm’s specialty and wide ranging resources.
His understanding of the business drivers involved with emerging growth companies combined with vast local knowledge has allowed him to optimize his clients leverage in the marketplace.
Contact Chris directly by phone at +1 (650) 480-2184 or via email at firstname.lastname@example.org.