Tag Archives: Austin


Phoenix ties San Francisco for No. 1 in tech job growth

Businesses looking for office space in the nation’s hottest tech markets should expect to pay a premium – and a hefty one in many of the top tech cities, according to a new research report by CBRE Group, Inc. The report, which analyzes the top 30 tech cities across the U.S. and Canada, showed an aggregate rent premium of 11 percent across all 30 markets. And while the numbers may have tech tenants in some markets cringing, companies located in or looking at metropolitan Phoenix should feel pretty good about two areas in particular: job growth momentum and rental rate growth.

Metropolitan Phoenix posted a two-year growth rate of 42.7 percent for high-tech services/software-centric jobs from 2012 to 2014. This translates to 12,662 new tech jobs added to the market over the two-year period. These jobs comprised 31.3 percent of overall new jobs added to the Valley’s office base. Comparatively, San Francisco also saw a high-tech services/software job growth rate of 42.7 percent from 2012 to 2014, which was 55.1 percent of that market’s overall office-job base. San Francisco’s actual number of new jobs in that time frame was 16,976.

In Phoenix, major high-tech leasing activity exceeded 1.0 million sq. ft. over the past two years; 40% was transacted through Q2 2015, making the current year tech companies’ most active yet in the metropolitan area. Tech firms employed 42,304 people Valley-wide at the end of 2014.

Rent growth across the Tech-Thirty markets display some of the biggest increases in office sectors across North America, with San Francisco and Silicon Valley topping the list with rental growth rates of 30.7 and 28.1 percent from Q2 2013 to Q2 2015, respectively. This growth translated to the two top tech markets posting average office rental rates of $67.99 and $49.20, respectively, in Q2 2015. In that same period, Phoenix saw rental growth rates of 8.3 percent and as of Q2 office lease rates were $22.06. Comparatively, Denver and Austin – two cities Phoenix regularly competes with in site selection bids for tech companies – have seen rental rate growth of 11.8 and 11.4 percent and posted Q2 rental rate averages of $24.15 and $31.33, respectively.

“Metropolitan Phoenix is undergoing major changes. We talk a lot about the diversification of the Phoenix and Arizona economies and reports like this one prove the investments that have been made towards economic expansion are paying off,” said Kevin Calihan, senior vice president with CBRE’s Phoenix office. “The Valley has a growing, young and educated workforce and an office market that’s attractively priced when compared to our competitors.”

Tempe came in as the Valley of the Sun’s hottest tech submarket, registering 18th on the Tech-Thirty list of the top tech submarkets in each market in terms of rent growth and 13th in net absorption. Tech occupiers’ demand for amenity-rich environments and quality office product has caused Tempe rental rates to appreciate when compared to overall market rates. And while current average rental rate in Tempe is $22.08, just two cents over the Valley wide average, premier properties can command rates nearing $40.00.

“Rental rates in Tempe can fluctuate depending on a number of factors, including location within the submarket,” said Calihan. “Rates in the more suburban parts of Tempe typically fall in the mid to upper $20.00 range, while rates in downtown Tempe are about $10.00 higher.”

In submarkets like Tempe, the lack of available space in blocks of 25,000 sq. ft. or more in buildings proximate to walkable amenities has developers jockeying to initiate new projects to chase this demand. Those developers that are successful in getting projects launched are being met with significant interest from tenants. Parkway Properties’ Hayden Ferry Lakeside is a prime example. The project’s third building broke ground in May 2014, and as it nears completion the property is already 85 percent pre-leased.

“There is definitely an urban migration happening in a variety of submarkets across the Valley,” said Calihan. “Companies, particularly tech companies, recognize employees want to work in amenity rich environments with access to public transit, multifamily housing options, and vibrant recreation and nightlife – submarkets like Tempe with projects like Hayden Ferry check all of those boxes.”

Chandler Innovation Center

GM Officially Opens Information Technology Center

General Motors is adding to its roster of Information Technology Innovation Centers with today’s grand opening of a facility in the Phoenix area.

The center, which will enable GM to in-source the company’s innovation capabilities and tap into a pool of new and experienced IT talent, joins innovation centers already operating in Warren, Mich., Austin, Texas, and Roswell, Ga.

Randy Mott, senior vice president, Global Information Technology & chief information officer, was joined at the ribbon-cutting ceremony and grand opening by more than 20 local and national elected officials including Chandler Mayor Jay Tibshraeny, U.S. Reps. Matt Salmon and Kyrsten Sinema, Arizona House of Representatives President Andy Biggs and Speaker of the House Andy Tobin. Approximately 500 facility employees also attended the event.

GM’s IT innovation centers are part of a companywide transformation to improve performance, reduce the cost of ongoing operations and increase its delivery of innovation. GM announced Chandler as the site of the company’s fourth IT Innovation Center in March 2013, and construction on the 170,000 square-foot center was completed in June this year.

“We have made significant progress transforming GM IT over the past 20 months,” Mott said. “The success of the Chandler Innovation Center is yet another important proof point that illustrates our progress.”

GM expects to hire a total of 1,000 employees at the Chandler Innovation Center over the next five years. Approximately 500 employees are employed at the facility, about 25 percent of whom are recent college graduates.

“The official opening of the IT Innovation in Chandler and the creation of about 1,000 high-paying, skilled jobs is great news for the local economy,” said Arizona Gov. Jan Brewer. “Today’s event speaks volumes about the business-friendly environment we have created in Arizona, including our high-tech talent and competitive cost of operating. I could not be prouder of our state and what this announcement means for the future of Arizona’s economy.”

Said Tibshraeny: “GM is exactly the type of technology employer we need in Chandler and in our state. The GM Innovation Center is a perfect complement to Chandler’s Price Corridor, and furthers the city’s reputation as a regional hub for innovators and world-class IT professionals.”

Stealth Software CEO Gerard Warrens.

Software firm picks Valley as U.S. HQ

Stealth Software CEO Gerard Warrens announced Tuesday that the Netherlands-based company will locate its United States headquarters in Arizona, which the company selected over Austin, New York and Silicon Valley.

The software development and marketing company based in Luxembourg announced plans to open its U.S. headquarters and hire 200 people in metropolitan Phoenix.

Warrens said Tuesday that the privately owned company will pick a city within two to four weeks where it will locate its new office.

Warrens says the company considered Austin, New York and Silicon Valley, but picked Arizona because it offered a competitive business environment and a skilled workforce.

The firm is looking to hire software developers, sales people and others.

It also wants to do work in the bioscience, aerospace and defense sectors and collaborate in research projects with universities across Arizona.

Arizona Gov. Jan Brewer says the announcement is a sign that Arizona’s business environment is becoming more competitive.


Ashton Woods Tops List of Most Trusted Builders in America

Trust is the new currency by which customers evaluate the merits of new-home builders, according to ground-breaking national research of more than 21,500 new- home shoppers in the Lifestory Research Most Trusted Builders in America Study SM.

The study finds that three-fourths of customers (76 percent) report that trust is a critical criterion by which they evaluate the merits of a home builder before making a purchase decision, placing significant emphasis on the perceived trustworthiness of home builder brands. “Home builders need to begin to ask themselves how consumers see their brand in regards to trust if they wish to effectively compete in the current marketplace,” said Lifestory Research President and CEO Eric Snider. “We find that the trust held by a customer toward a home builder is playing a central role among home shoppers as they seek to reduce uncertainty in the high-risk decision of purchasing a new home.”

The Lifestory Research Most Trusted Builders in America Study tracks 133 home builder brands in the top 27 housing markets in the United States.  However, for purposes of examining builders at the national level for this release, a builder brand was included if a builder was in the top 30 builders in the United States and was selling homes in at least three markets.  Based on this, the following brands were included in the national study of the Most Trusted Builders in America: Ashton Woods, Beazer, Centex, DR Horton, David Weekley, Del Webb, Drees, Gehan, Highland (TX), KB Home, KHovnanian, Lennar, M/I, Meritage, Perry, Pulte, Richmond American, Ryan, Ryland, Shea, Standard Pacific, Taylor Morrison, Toll Brothers, Trilogy by Shea Homes, and Woodside.

The Most Trusted Builder in America was Ashton Woods, the nation’s 25th largest builder selling homes in Atlanta, Austin, Dallas, Houston, Orlando, Phoenix, Raleigh, San Antonio and Tampa.  Ashton Woods produced a Net Trust Quotient Score of 111, followed in order by David Weekley Homes (108.5), Trilogy by Shea Homes (106.9), Perry Homes (106.8), Drees Homes (106.8), Meritage Homes (104.2), Highland Homes of Texas (104.2), Taylor Morrison Homes (101.6), M/I Homes (100.8), and Woodside Homes (100.8). Trilogy by Shea Homes also was recognized as the Most Trusted Active Adult Builder in America.

In a shift away from product usage and satisfaction research, Lifestory Research’s investigation focuses on how brands influence the purchase behavior of home shoppers. “We have seen a fundamental shift in consumer psychology that has occurred in response to the massive social revolution that has taken place over the last several years,” Snider said.  “Consumers are referencing customer advocacy organizations less for product information; instead, people are turning to their peers, friends, and digital social networks to garner opinions.  Moreover, in the process of shopping for a home, consumers rely upon their direct experience they have with the multitude of builder brands in a given marketplace.  As a result, we have seen brands rise in importance in the consumer purchase process.”

The study, in its first year, evaluates attitudes from thousands of consumers who are actively in the process of shopping for a new home in one of the top 27 housing markets in the United States.  Trust is measured through the Lifestory Research Net Trust Quotient Score.  This score is based on the fundamental perspective that every organization’s customer can be divided into three categories: “advocates” are customers who feel a significant trust toward a given brand; “neutrals” are customers who trust a specific brand, but they do not see a specific brand as standing on the shoulders of other brands in regards to trust; and “antagonists” are skeptics who have little, if any, trust in a specific brand.

The most effective way to gauge the trust of a brand is to take the percentage of customers who are trust advocates and subtract the percentage of people who are dis-trusters.  Scores are standardized (using z scores and t scores) with 100 being equal to the overall average.  Scores can array above and below the 100 point average.  Each Net Trust Quotient Score represents the net value of a brand on trust.  A brand with a high positive score is an indication that the brand is trusted by a large portion of the target market.  Conversely, a low score is an indication that the brand is not trusted by the consumer marketplace.

To qualify to participate in the study, participants must have met all of the following criteria:  Household located in the metro area of one of the 27 markets in the study (see link for list of markets), a household income in excess of $50,000, between the ages of 25 and 69, actively shopping for a home during the last 90 days, and with intentions of owning their next home (versus renting).

Detailed information about the study can be found at www.lifestoryresearch.com/builderrankings.