Silicon Valley who? Tech companies continue to flock to the Triangle

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Silicon Valley who? Tech companies continue to flock to the Triangle

This story was written for WRAL TechWire partner CBRE | Raleigh.

With the tech scene in the Triangle continuing to grow, many wonder what that means for our market. What exactly does our tech market look like and what is drawing these companies in?

One user on the United States-based question-and-answer site Quora asked just that; “What is the tech scene like in Raleigh-Durham, North Carolina?”

A Triangle-based software engineer replied, “Extremely strong. It’s actually one of the strongest tech scenes in the nation. Cisco, IBM, the Research Triangle Park (not a company, but a huge research center), GlaxoSmithKline (biotech), Red Hat and many other huge tech-based companies call Raleigh home.”

“[North Carolina] State University is primarily for engineers and they deliver strong engineering fundamentals to the computer science majors as well,” the responding user continued. “It’s also still growing in terms of tech strength; and since taxes are much lower here than in other states, companies seem to be flocking here.”

This discussion occurred in 2014, but it’s not irrelevant news. In the five years since this conversation happened, downtown Raleigh and the Triangle at-large have welcomed more tech companies to its ever-expanding roster, many of which have chosen this area over regions like Silicon Valley, Austin or New York City.

“I think companies are choosing the Triangle for many reasons, one of which is the talent that’s coming out of our region’s major universities — UNC Chapel Hill, Duke and N.C. State. Historically, if you look at where graduates are going, they’re staying put versus going to D.C., Atlanta or New York,” said Brad Corsmeier, executive vice president of the Advisory & Transactions Services group at local commercial real estate company CBRE | Raleigh. “Additionally, add in the quality of life in the area and the fact that commercial space is cheaper compared to other major tech markets, and you have a compelling reason to relocate or grow here.”

Companies like tech giant SAS, a statistical software company that’s been an area staple since the 1970s, and startups-turned-major players like product optimization software company Pendo have chosen the Triangle as their headquarters. Pendo, which was founded in Raleigh in 2013, cemented the city as its HQ site and announced plans earlier this year to occupy 125,000 square feet as the anchor tenant of the upcoming 301 Hillsborough development.

Compared to regions like Silicon Valley and New York City, real estate in the Triangle to house these big companies and the big brains that make them successful is relatively affordable. Additionally, many of the commercial buildings these companies are moving into are highly amenitized with features such as gyms, cafes, conference centers and outdoor areas, or at least the promise of proximity to these conveniences.

“These younger millennial workers in particular aren’t buying houses, they’re renting. They want to live downtown and feel like they’re in a big city. Both downtown Raleigh and downtown Durham have gotten hipper with more bars and restaurants and things to do,” Corsmeier said. “Our downtowns have become more of 18-hour cities, which attract younger workers, and in a lot of cases are where the technology employee base is located.”

“It’s important to not lose sight of the fact that there is tech coming into our market that isn’t necessarily just in downtown Raleigh or downtown Durham,” added Jason High, executive vice president of Occupier Services at CBRE | Raleigh. “The area in and around RTP has always drawn in tech companies due to its location, which allows companies to draw employees from anywhere in the market, and cost, which is a fair bit cheaper than an urban alternative. Parking also becomes easier to solve in the suburbs.”

He’s not wrong.

SAS is based in Cary, RTP is home to 200 companies and counting, Durham boasts an impressive startup scene, Holly Springs is home to international pharmaceutical company Seqirus, and there are plenty of entrepreneurs in smaller towns like Garner and Chapel Hill. Making a list of all the tethers of tech in the region would be exhaustive, but impressive.

Companies with roots or ties to Silicon Valley are expanding here too. Align Technology, the company behind the Invisalign teeth straightener, opened its Raleigh office with less than 20 employees in 2015. Earlier this year, it completed its purchase of its current office building in Morrisville that will accommodate 200 more employees to its current team of 230.

“We’ve seen time and time again companies that have opted to grow here. It’s the availability of talent from the universities, it’s the cost of living, it’s the quality of life,” said High, echoing Corsmeier’s sentiments.

When it comes to attracting tech companies, the Triangle isn’t interested in being the “East Coast Silicon Valley” as its been called in the past. Rather, it is equipped with the resources, real estate and talent to be a stand-alone market that rivals the other well-known tech giant markets.

This story was written for WRAL TechWire partner CBRE | Raleigh.

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Silicon Valley who? Tech companies continue to flock to the Triangle


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