D.C. Ranks Third Among U.S. Tech Cities According To New Report
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Tech entrepreneurs looking to launch new startups outside of the Bay Area may want to look harder at Washington, D.C.
The nation's capital ranked as the No. 3 tech city in the U.S. in Cushman & Wakefield's Tech Cities 1.0 report, coming in behind San Jose and San Francisco. Boston/Cambridge and Raleigh/Durham/Chapel Hill rounded out the top five.
Cushman & Wakefield Principal Economist Ken McCarthy and researcher Robert Sammons spent six months putting together the firm's inaugural tech report, which analyzed factors such as talent, capital and growth opportunity. The report also considered the region surrounding the cities, so D.C. benefited from biotech hubs in suburban Maryland and NoVa's defense, cybersecurity and aerospace industries.
D.C. was propelled by its educated workforce, top universities and the presence of the federal government, Cushman & Wakefield Director Theo Slagle said.
"It’s a combination of a healthy local economy coupled with a highly educated workforce, and the fact that tech companies, especially larger ones like Google, Facebook, Yahoo and Amazon all have a significant presence here," said Slagle, one of the District's top tech brokers. "They are here because their influence on policy is becoming more and more important."
Facebook is working on a deal to double its D.C. footprint and Yelp, which does not have a significant D.C. office presence, is on the market for at least 80K SF. D.C's tech brokers expect several major deals to be signed this year.
In addition to large firms looking to work with the government, D.C. also has a growing number of traditional tech startups that have expanded their presence and chosen to stay in the metropolitan area. These companies include SocialTables, EverFi, Blackboard, Cvent and 2U, which just moved into a new 281K SF office.
D.C. has recently attracted a growing amount of venture capital, Slagle said, plus it has an expanding footprint of co-working spaces where startups can launch.
Even with all of these factors, Washington, D.C., still has the reputation of a political town and is not nationally regarded as a tech hub, but Slagle said that image could be changing.
"It just doesn’t get portrayed as a tech town because of what’s always on the news, which is the government," Slagle said. "But tech companies were the largest sector of job growth in the region last year."