Tech start-ups are increasingly looking toward Detroit as an affordable alternative. Evidence of this came in CBRE’s sixth annual Scoring Tech Talent Report, which ranked Detroit as the 20th strongest tech market in the United States and Canada.
The Scoring Tech report annually ranks 50 major U.S. and Canadian markets based on their ability to attract and grow tech talent. According to this report, the number of tech workers in Detroit has increased by 24.6 percent from 2012 through 2017.
CBRE says 84,910 tech workers now work from the Detroit market.
What’s behind Detroit’s rise? CBRE points to the growth of Detroit’s Millennial population. According to the company’s research, the population of Millennials in their 20s living in the Detroit market has grown by 14,119, or 10 percent, since 2011.
The Detroit area is also seeing a rise in the number of graduates earning technology-related degrees. CBRE said that the number of students earning these degrees jumped 28.2 percent from 2011 through 2016. The Detroit area is now seeing an annual addition of 5,241 new tech graduates.
In little surprise, CBRe ranked the San Francisco Bay area as the top market for tech talent in 2018. Seattle, Washington D.C., Toronto and New York City rounded out the top five.
CBRE relies on 13 factors to rank these markets. They include tech talent supply, growth, concentration, cost and completed degrees. CBRe also looks at the industry outlook, job growth and the market outlook for both office and apartment rent growth.
In the Detroit market, tech wages have risen from 2012 through 2017, increasing 9.9 percent to an average of $85,284 a year. At the same time, the cost of living in Detroit remains below the national average, at 94 percent of housing and relative costs.
The biggest tech office space lease so far this year was a 122,300-square-foot lease for DXC Technology at 3000 University Drive.
“We have seen exceptional growth in Detroit’s tech market in recent years as companies have come to recognize the deep talent pool that the city has to offer,” said Mark Collins, executive vice president with CBRE, in a statement. “With this strong labor force in place, and the relatively affordable living and operations costs, this market should continue to expand in the coming years.”