New York has overtaken San Francisco to become the world’s “premier tech city” according to a new report from U.K.-based real estate consulting firm Savills.
The report evaluated 30 different cities across the world based on their business and technology environments, talent pool, real estate costs, transportation infrastructure, cost of living and other factors. New York City took the top spot in this year’s ranking thanks to “a deep talent pool and the city’s reputation as a global centre of commerce.”
Paul Tostevin, an associate director at Savills and one of the report’s authors, told Inman in an email that both New York City and San Francisco benefited “from being in the U.S., home to the western world’s biggest tech [companies] and the bulk of [venture capital] funding.”
San Francisco had taken the top spot on Savills’ rankings in previous years, but in 2019 has dropped into second place. London, Amsterdam and Boston round out the top five spots, respectively. The U.S. is generally well represented at the top of the list, with Los Angeles coming in seventh, Austin in eighth, and Seattle in 12th.
According to Tostevin, some of the smaller cities on the list “offer residents city living on a smaller footprint allowing shorter commutes, easier access to amenities and a better work/life balance.”
After Seattle the entire list is comprised of cities outside the U.S. and the report’s authors single out China as having been particularly successful at building technology hubs.
“Chinese Tech Cities have risen fast, and now account for a higher share of [venture capital] investment than their U.S. counterparts,” Savills’ report states.
This is the third year that Savills compiled its list. The London-based company was founded in 1855, and maintains hundreds of offices on four continents. It specializes in providing research and consulting services related to property investment.
Cities on Savills’ list serve as “testbeds for innovation” and have been generally successful at attracting venture capital, the report states. They’re also economically beating competitor cities.
“Tech Cities are outperforming other global centres,” the report states. “GDP across the 30 Tech Cities is forecast to rise by 36 percent in the next decade, against a rate of 19 percent across other developed cities.”
Some observers expect that trend to continue in New York City. Wendy Forsythe, the chief operating officer of HomeSmart International, described the ranking as “big news for the Big Apple.” She told Inman that while San Francisco is facing a “retention issue,” New York is likely to produce more real estate startups.
“I think we have already started to see this but [it] will likely become more predominant in the near future,” she added.
But not everyone is convinced New York is indeed the leading technology paradise Savills’ new report might suggest. Asked about the real estate component of the ranking, Victor Lund — founder of the real estate consulting firm WAV Group — told Inman Tuesday that New York City can’t actually beat California cities in terms of land costs.
“Look at property tax differentials between the two states and cost of living and you will see that NYC is far more expensive than California,” Lund explained. “By just looking at housing values, they are not looking at total cost.”
Lund also argued that a number of other California cities including San Jose, San Diego and Los Angeles are more competitive tech hubs than New York City.
Still, there’s no doubt New York City has managed to attract both talent and companies in recent years — a fact that was made particularly apparent in November, when Amazon announced it would open a much-discussed HQ2 office in Queens. (The company will also open a major new office in Crystal City, Virginia.)
The HQ2 announcement sparked a frenzy in the area’s real estate market and some consternation from locals, but highlighted New York’s ability to beat out other rising tech centers — such as Austin, Boston, and Los Angeles — when competing for high tech jobs.
This post was updated after publication with comments from an author of the Savills report and additional expert commentary.