A new report from CBRE identifies Waterloo as North America’s third fastest-growing “opportunity market.” The report, 2019 Scoring Tech Talent, says that Waterloo has witnessed an incredible 40 percent growth in tech jobs over the past five years, which put the total tech workforce at 20,500.
Opportunity markets offer quality labour pools and affordability that supports rapid scalability. Waterloo has seen this story play out with numerous local companies, including homegrown scaleups like Vidyard, North and ApplyBoard. Tech giants are also tapping into Waterloo’s unique combination of tech talent quality and cost – which CBRE called “exceptional” just last year – with Google, Square and SAP all having important, growing operations in the area.
CBRE identified three key takeaways from the report, all of which bode well for Waterloo.
First, shrinking availability of tech talent in leading markets – including Silicon Valley and New York – is spurring hiring momentum in smaller markets in the US and Canada as expanding tech companies seek additional labour.
Second, while big markets continue to produce the largest volumes of jobs and tech graduates, low unemployment rates have dampened momentum in many leading tech talent markets. The smaller “next 25” markets identified by CBRE, including Waterloo, have absorbed much of the tech labour demand.
Finally, the high tech industry now accounts for about 20% of major office leasing activity, but as a result there is limited availability in many large markets, which is pushing rents in those markets to peak levels.
Tapping into local talent pools is a big reason why New York-based Insticator decided to open an office in Waterloo earlier this year and why Faire – which Forbes just called one of the “next billion-dollar startups” – decided to locate their engineering headquarters in Waterloo when the company was founded (despite still having their marketing and operations office in Silicon Valley). Home to Canada’s largest engineering school and #1 computer science program, Waterloo is producing a steady pipeline of world-class talent.
As for real estate availability, Waterloo is currently in the midst of a multi-billion dollar development boom spurred on – at least in part – by the opening of a new light rail transit system that connects many of the most important assets in the Waterloo tech ecosystem. In the downtown Kitchener area alone there is more than 375,000 square feet of office space becoming available in in the next few years, as well as an additional 300,000 square feet in a $150 million development just steps from Google’s Canadian engineering headquarters.
The report also gave Toronto – just 100km/65mi from Waterloo – the third highest tech talent score overall and noted that it had the biggest “brain gain” among major centres. The Toronto-Waterloo Corridor is the second largest tech cluster in North America.
CBRE is the world’s largest commercial real estate services and investment firm.