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September 06, 2015

Report: University City one of the hottest tech markets in US, Canada

Office rents growing at over six times the rate of the rest of the city

Tech University City
Philly Tech Week Philly Tech Week/Technically Philly

Philly Tech Week gathers the city's best for a week of events.

University City is one of the hottest markets for tech markets in North America, a new report from CBRE, Inc. says.

The neighborhood has an office rent premium of 45 percent, the fourth-highest premium in the US and Canada. The only places that beat it were East Cambridge in Boston, Santa Monica in LA and Google's home of Mountain View, California.

The report, which analyzed the top 30 tech cities in North America, found great variation in rents even within Philadelphia. Since tech companies tend to cluster together, certain neighborhoods can rocket past the rest of the city in price.

For example, the average asking rent for office space in the city as a whole grew three percent from 2013 to 2015. In University City, however, rent grew 20.4 percent. That's over six times as much in the same period. 

“Philadelphia is uniquely positioned for such strong tech growth," noted Rija Beares, head of CBRE's Tech and Media Practice in Philadelphia.

Strong investments have helped Philly's tech scene. The Comcast Innovation and Technology Center and the University City Science Center added 2.8 million square feet of office and lab space to the city, and the city's health care center benefits from the presence of highly-regarded institutions like CHOP and Penn Medicine.

"With education and medicine typically being among the strongest drivers for tech growth, Philadelphia has among the best in the world in both,” said Beares.

The report noted that, across the U.S., the tech industry has created 730,000 jobs since 2009 and accounted for 20 percent of major office leases.