Technology Boom 2.0

Austin has a solid reputation for being a tech savvy city and has most recently garnered much attention from the national press as one of the best cities to live in the US. In addition to the national recognition, Austin’s resistance to the national economic crisis has only increased the attractiveness of the city. As a result, the technology sector in Austin has continued to flourish.

In the industrial / flex market, we are continuing to see the expansion of technology oriented businesses. Technology firms comprise 35% of HPI’s new leases (by square footage) this year. This high percentage of technology leases can be largely attributed to Austin being a tech magnet, but can also be attributed to a shift in business IT strategy. More companies are seeking Sarbanes / Oxley compliance and HIPAA compliance. In turn, more data centers are being built to accommodate server redundancy and remote server backup. Fortunately, several companies are choosing Austin as “the” place to build these data centers.

In addition to new data centers being constructed, Austin is also attracting more technology companies geared toward the younger crowd. We are seeing companies like Google and Electronic Arts set up shop in Austin to harness the highly educated, tech savvy, young workforce. With a large and highly educated graduating class from the University of Texas every year, it is unlikely that this migration of youth-driven tech to Austin will stop any time soon.

At the same time, Austin is making a strong push to woo more biotechnology companies and diversify its portfolio of tech companies. The Texas ETF (Emerging Technology Fund) is providing funding to businesses who wish to move to Texas. Already, HPI has seen its pharmaceutical company leases comprise 9% of its leasing (by square footage) in 2008.

As companies realize the numerous benefits of being located in Austin, we expect to see this trend of attracting Technology businesses of various disciplines to our great city.