THE PORTLAND TECH STORY

How the City of Roses has bloomed into a key West Coast tech market TABLE OF CONTENTS 01 03 05 07 The The Tech Cost of Workforce Portland Sector and Living Tech Story Portland’s History 11 13 17 19 21 Education Cost of Quality Taxes Acknowledgments Doing of Life Business THE PORTLAND TECH STORY 5

The Portland Tech Story report examines the value proposition to tech companies and how the market compares to some of the most dynamic tech cities on the West Coast. While companies continue to THE PORTLAND TECH STORY operate and expand in established markets like the Bay Area and Seattle, rising costs and intense competition for talent have continued to motivate business leaders to consider alternative markets. The most competitive alternative locations are generally smaller with strong talent pools, business friendly environments and a high quality of life. Portland is an attractive location, not just because of its competitive advantage with regard to cost, but because of its growing talent pool; increasing portfolio of tech companies, expanding population and tech resources; paired with the high quality of life as the heart of the .

Testimonials

Coinbase Mercari Expansion Date: Opened office in June, 2018 Expansion Date: Opened new office in February 2017 Employees: 100 Employees: 50 “Opening a new office in Portland will help us On Portland’s ties to Japan: “As a company coming tap into the city’s incredibly talented, innovative out of Japan, and being Japanese-American myself, open-source and blockchain communities. We look it’s comforting to know the city has a strong ties with forward to engaging the city’s rich talent pool and its Japan. Some employees can speak Japanese, and thriving tech community.” there’s a strong interest in Japanese culture. I can ­— Coinbase VP of Operations and Technology Tina tell people here have interest — there’s a Japanese Bhatnagar Garden here in Portland.” ­— Mercari’s U.S. CEO and Co-Founder Ryo Ishizuka

Salesforce Expansion date: Opened office in July 2013 Employees: 200 “We looked at a number of cities across the US and chose Portland for several reasons, including its incredible talent pool and proximity to our headquarters in San Francisco. The community [in Greater Portland], it really jives with the San Francisco feel and the culture that .com has.” ­— Salesforce Spokesman Andrew Schmitt Source: CBRE Research andGreater Research CBRE Portland 2018 Source: Inc, Impact Report Economic TechnologySource: IHS of Association PORTLAND’S TECHHISTORY Tripwire, Inc. AWS Elemental Biamp Puppet Sage Software Navex Global IncSigma Design, Planar Viewpoint Inc. , Vacasa DiscoverOrg Inc. Ruby Receptionists, SalesForce Flir Fiserv Airbnb Relic New Webtrends (Oracle) Semiconductor Qorvo Research Lam COMPANY NAME inGreaterBased Portland TechLeading Companies Average Wage Billion inSales Billion inExports Total Establishments Total Number Jobs of Industry Snapshot 219 231 251 297 300 300 304 317 315 344 370 449 460 486 500 500 500 500 515 785 1,000 1,000 1,291 1,600 19,500 EMPLOYEE # $117,582 $37.60 $7.20 3,400 78,300 jobs opened inPortland MSA opened Planar Inc Systems, and computing startup RNA RNA startup computing The Silicon ForestThe Silicon through the acquisition Intel 2012 employment Source: ESRI, 2019 ESRI, Source: 1996 Integra is formed all Networks and moved moved Networks and ESI Moves from1962 Moves ESI Semiconductor Corp, Semiconductor 1995 Digimarc Corp for Oregon growsfor Oregon to employees opens in opens employees engineers from Intelengineers Washington County 1970 by formerby Tektronix Portland proper to Systems, founded founded Systems, opens its doors in doors its opens of OGI Telecomm OGI of 2010 into downtowninto is formed by 17 is 17 formed by Portland cloud Floating Point Sequent Sequent 1983 Lattice Lattice 1983 bought bought Dell Beaverton Beaverton 17,000

2000s 1990s 1980s 1970s 1940s-1960s by formerby Nike employees inHillsboro opens 1987 Forest the Silicon 1986 InFocus Corporation joins and opportunity for West Coast tech expansion Portland is amajor player 2018 the STEMfields 7.2%2017 are Portland of in jobs in3years 28% Tech2013 grows talent pool by from chip maker the acquired factory arrives when the Arizona-based Microchip Technology2002 1997 Carillion inHillsboro opens attract VC to Oregon to companies the first one of inthelocation market andwas 1981 Mentor Graphics opens Hillsboro 1974 Intel near location opens County toPortland Washington CBD 1951 Tektronix from moves inthe region tech companies Industries are high first Scientific Tektronix and Electro1940 7

Recent Tech Job Announcements THE PORTLAND TECH STORY COMPANY NAME LOCATION INDUSTRY TYPE EXPANSION / NEW AWS Elemental Portland Software/Computing New/expansion Vacasa Portland Software Expansion Aruba Portland Software New Element Six Gresham Advance Manufacturing New Coinbase Portland Software New Mercari Portland Software New CalMax Tualatin Computers & Electronics New Puppet Portland Software Expansion Auric Solar Tualatin Clean Tech New Polysync Portland Software/Media New New Relic Portland Software Expansion DWFritz Automation Wilsonville Precision Automation Expansion Accela (Springbrook) Portland Software Expansion Portland Software Expansion MGC Pure Chem. America Forest Grove Advance Manufacturing New Citrix Portland Software Expansion RealWear Vancouver Software New Acorns Portland Software New Viewpoint Portland Software Expansion moovel North America Portland Software Expansion Expensify Portland Software/Media New ISITE Portland Technology New OSG Corp. Scappoose Manufacturing New

Source: Greater Portland Inc, 2018 COST OF LIVING

West Coast Tech Markets

Portland San Diego Orange County Los Angeles MEDIAN HOME VALUE $426,300 $639,900 $772,400 $689,500 APARTMENT RENT: 900 SQFT/ MO $1,513 $1,956 $2,216 $2,235 UTILITIES: 2 PERSON AVG/MONTH $198 $154 $186 $104 INTERNET: 8MB $40 $45 $54 $48 SALES TAX 0.0% 8.6% 8.6% 8.6% PUBLIC TRANSIT: MONTHLY $100 $69 $67 $98 GASOLINE: ONE GALLON $3.48 $3.84 $3.80 $3.92 BASIC DINNER OUT: 2 PEOPLE $39 $45 $42 $50 MOVIE TICKETS: 2 PEOPLE $23 $28 $28 $30 LATTE OR CAPPUCCINO $4.41 $4.71 $4.78 $4.81 PINT OF BEER $5.57 $7.00 $7.00 $8.00

Portland San Francisco Seattle MEDIAN HOME VALUE $426,300 $998,000 $1,295,000 $649,950 APARTMENT RENT: 900 SQFT/ MO $1,513 $3,701 $3,641 $2,127 UTILITIES: 2 PERSON AVG/MONTH $198 $156 $177 $160 INTERNET: 8MB $40 $57 $52 $51 SALES TAX 0.0% 8.6% 8.6% 9.2% PUBLIC TRANSIT: MONTHLY $100 $132 $87 $92 GASOLINE: ONE GALLON $3.48 $3.80 $3.92 $3.56 BASIC DINNER OUT: 2 PEOPLE $39 $57 $54 $54 MOVIE TICKETS: 2 PEOPLE $23 $27 $30 $28 LATTE OR CAPPUCCINO $4.41 $4.15 $4.74 $4.69 PINT OF BEER $5.57 $6.00 $8.00 $7.00

Source: Expatistan, Tax Foundation, RealtyTrac 9

Population Growth Rate: THE PORTLAND TECH STORY Portland vs National

    

  National

    Growth Rate 

  Portland        Portland National Growth Rate Source: Location Analytics, ESRI, 2019

Portland’s Population Growth Strongly Driven by Net Migration

Population 90,000 Net Migration Natural Increase 80,000

70,000 Net 60,000 Migration 50,000

40,000 30,000 Natural 20,000

10,000 Increase

0 1990 1993 1997 2000 2004 2008 2011 2015

Source: Greater Portland Inc., 2018 WORKFORCE

The Portland market is one of the top growing high-tech job markets in the nation. With more than 78,300 jobs and record low unemployment, Portland not only offers an expanding tech market but continues to be a prime West Coast location for tech expansion and innovation. Offering a lower cost of doing business and high-quality talent, Portland’s future pipeline continues to be promising with a highly educated and capable workforce.

Portland High-Tech by the Numbers 46% The amount of Greater 28% Portland’s labor pool Employment growth that works in STEM since 2012 $800M+ Fields Amount of tech related venture capital raised in Oregon over the last 5 yrs Computer + 183 electronics establishments

The number of firms in Greater Portland in the Software & IT sector. A 68% 927 $37.6B increase in the 2,000+ last 10 years Made in sales revenue in Graduates in Computer Science from PDX schools computers and electronic each year industry 78,300 Tech workers in the Portland region 16X The concentration 35,451 of semiconductor Total number of jobs in processors The concentration Computer & Electronics of computer hardware 6.5X engineers

Source: Greater Portland Inc, 2018 11

Workforce vs. Other Tech Markets THE PORTLAND TECH STORY METRO LABOR FORCE UNEMPLOYMENT 2017 % CHANGE RATE TECH JOBS (2012-2017) San Francisco 1,116,390 2.5% 106,450 47.7% Silicon Valley 1,133,700 3.0% 170,030 29.5% Portland 1,333,000 3.8% 51,720 25.4% San Diego 1,482,200 3.8% 70,100 20.4% Seattle 1,713,000 3.8% 145,140 19.4% Orange County 1,643,200 3.3% 69,480 14.4% Los Angeles 6,192,700 4.9% 133,400 11.0%

Source: CBRE Scoring Tech Talent, 2018, U.S. Bureau of Labor Statistics, March 2019.

Tech Job Growth (5-Year Change)

Tech talent density measures the number of computer and mathematical workers in a market relative to the market’s total population. The number of tech workers in the Portland metro as a percentage of its population has increased an average of 25.4% over the last 5 years, outpacing growth in markets such as New York and San Francisco.

San Francisco 47.7%

Silicon Valley 29.5%

Portland 25.4%

San Diego 20.4%

Seattle 19.4%

Orange County 14.4%

Los Angeles 11.0%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0%

Source: CBRE Labor Analytics, 2017 EDUCATION

NAME CITY STUDENTS NUMBER OF ANNUAL ENROLLED GRADUATES Oregon State University Corvallis, OR 29,576 5,084 Portland Community College Portland, OR 29,003 4,350 Portland State University Portland, OR 27,488 4,138 University of Oregon Eugene, OR 24,032 3,927 Clark College Vancouver, WA 10,477 2,843 Mt Hood Community College Gresham, OR 8,758 1,927 Concordia University Portland, OR 7,182 862 Clackamas Community College Oregon City, OR 6,407 1,217 Oregon Institute of Technology Wilsonville, OR 4,777 774 University of Portland Portland, OR 4,338 846 George Fox University Newberg, OR 3,925 687 Pacific University Forest Grove, OR 3,810 676 Lewis and Clark College Portland, OR 3,526 555 Washington State University Vancouver Vancouver, WA 3,426 975 Oregon Health and Science University Portland, OR 2,899 NA Linfield College McMinnville, OR 1,700 298 Reed College Portland, OR 1,453 298 Pioneer Pacific College Wilsonville, OR 1,170 761

Source: National Center for Education Statistics 30 Number of colleges, universities and community colleges in Greater Portland metro 7th Rank among the top 50 major metros in Both PSU and OSU are ranked in the percent of workforce with a bachelor’s Most Innovative Schools in the Nation degree or higher by U.S. News and World Report (2018)

Source: CBRE Research, 2019 13

Technology Degree Graduates within 120 miles THE PORTLAND TECH STORY INSTITUTION NAME & TYPES OF DEGREES/ RELEVANT DEGREE PROGRAMS/ NUMBER OF ANNUAL LOCATION CERTIFICATES OFFERED CERTIFICATES OFFERED GRADUATES WITH RELEVANT DEGREES/ CERTIFICATES Oregon Institute of Certificates, Bachelors, Information Technology (Bachelors), 728 Technology, Masters Computer Engineering Technologies Wilsonville, OR (Certificate, Bachelors), Computer Software Technology (Certificate, Bachelors) Oregon State Certificates, Bachelors, Computer Science (Bachelors, Masters, 291 University, Masters, Doctorate Doctorate), Statistics (Masters, Doctorate) Corvallis, OR Portland Community 2-year degree Computer Programming, Data Entry / 186 College, certificate Microcomputer Applications, Network and Portland, OR System Administration, Web Page, Digital/ Multimedia and Information Resources Design, Word Processing Washington State Certificates, Bachelors, Computer and Information Sciences 143 University Vancouver, Masters (certificate), Computer Science (Certificate, Vancouver, WA Bachelors, Masters), Statistics (Bachelors), Applied Mathematics (Certificate, Bachelors, Masters) Portland State Certificates, Bachelors, Computer Science (Bachelors, Masters, 111 University, Masters, Doctorate Doctorate), Data Modeling / Database Portland, OR Administration (certificate), Statistics (masters) University of Oregon, Certificates, Bachelors, Computer and Information Sciences 93 Eugene, OR Masters, Doctorate (Bachelors, Masters, Doctorate) Lane Community 2-year degree Computer and Information Sciences, 70 College, certificate Computer Programming (Specific Eugene, OR Applications), Computer Programming (General), Computer Support Specialist, Information Science, System Networking Mt Hood Community 2-year degree Computer and Information Sciences, 57 College, certificate Computer and Information Systems Gresham, OR Security, Computer Systems Networking, Database Administration, Information Technology, Information Resources Design, Computer Technology Engineering South Puget Sound 2-year degree Computer Programming / Programmer 52 Community College, certificate General, Computer Systems Networking / Olympia, WA Telecommunications, Data Modeling, Data Processing, Web / Multimedia Management University of Portland, Certificates, Bachelors, Computer Science (Bachelors), 45 Portland, OR Masters Mathematics (Bachelors) Chemeketa 2-year degree Computer and Information Sciences, Web 34 Community College, certificate Page / Digital Media and Information Salem, OR Resources Design, Computer Technology

Source: Greater Portland, Inc, 2018 HOTTEST TECH SUBMARKETS

CBD Hillsboro/Beaverton

16,145,892 12.8% $34.78 5,016,201 13.9% $22.47 TOTAL BASE VACANCY RATE LEASE RATE (FSG) TOTAL BASE VACANCY RATE LEASE RATE (FSG)

The urban core for the city of Portland, the CBD With a large tech manufacturing footprint, the submarket houses some of the tech industry’s region has been a leading market for the Portland largest names including eBay, Coinbase, and tech industry as the home of Intel’s expansive Finastra. The submarket has successfully attracted campus. The primary region referred to as the numerous companies due to its ease of access, housed some of the region’s first available space, and Class A development. The tech tenants and continues to attract companies CBD submarket has also been among the fastest and talent. Intel’s impact in the region has spurred growing in the national for rental rate growth not only tech development but also driven housing, due to prime space availability and premier retail, and hospitality for the Hillsboro area. construction deliveries.

Northwest/Pearl Close-In Eastside

5,748,270 16.5% $36.93 1,742,471 7.5% $35.13 TOTAL BASE VACANCY RATE LEASE RATE (FSG) TOTAL BASE VACANCY RATE LEASE RATE (FSG)

Named one of the 15 coolest neighborhoods Traditionally seen as a manufacturing submarket, in the world, Portland’s Pearl District is both Close-In Eastside is currently going through a fashionable and lively as a top location for tech renaissance for office expansion with a huge and creative companies. Filled with reclaimed draw for creative office and tech focused tenants. warehouse spaces, premier retail, and a slew of Its proximity to the urban core coupled with the top restaurants, the emerging Northwest market young millennial workforce of eastside allows this has gained momentum over the last few years for submarket to offer a diverse and edgy opportunity residents and companies. The submarket benefits for tech focused groups including BBVA and from an influx of urban living options from high rise Autodesk. Surrounded by some of Portland’s most condos to traditional residential neighborhoods as prominent bars and restaurants, Close-In Eastside is the premier live, work, play. the market to watch for the future of Portland tech.

*Submarket statistics based on CBRE quarterly reported data for office properties Source: CBRE Research, 2019. 15

LIVABILITY THE PORTLAND TECH STORY

Rent to Income Ratio

Portland Orange County Seattle San Diego

26.7% 31.2% 32.2% 32.7%

Los Angeles Silicon Valley San Francisco

39.5% 43.0% 48.8%

Source: U.S. BLS, Axiometrics, and CBRE Research 2019

Walk Score, Bike Score, Transit Score METRO BIKE WALK TRANSIT

Portland 81 65 52 San Francisco 80 86 71 Seattle 70 73 60 Silicon Valley 59 51 41 Orange County 58 66 45 Los Angeles 55 67 53 San Diego 39 51 37

Source: Walk Score, 2018 QUALITY OF LIFE

Most#1 Bike Friendly City (League of American #1No. 1 Best Place to Live (U.S. News and World, Bicyclists, 2017) 2018)

Best#1 Coffee City in the U.S. (Condé Nast #1No. 1 City Where Outsiders Want to Move In, Traveler, January 2018) and Residents Plan to Stay (Zillow, April 2017)

#1 #1 No. 1 Coolest City in America (MSN Travel, July No. 1 Best Place for a Business (Forbes 2017) 2017) 17

AMERICA’S THE PORTLAND TECH STORY BEST AIRPORT

Portland International Airport has been voted 6X “America’s Best Airport” in Travel+Leisure Magazine’s reader survey (July 2018) Photo Credit: www.portofportland.com 18M 80 295 36,950 Annual Non-stop passenger Daily non-stop Daily non-stop passengers destinations passenger departures seats available

Air Canada Delta Southwest 17 AIRLINES Alaska Hawaiian Sun Country Key international and domestic passenger carriers American jetBlue Virgin serve travelers at Portland International Airport: Boutique Air Iceland Air America Condor Pen Air Volaris Frontier Spirit United

Amsterdam, Netherlands Reykjavik, Iceland 11 NON-STOP Calgary, Alberta, Canada San Jose del Cabo, Mexico INTERNATIONAL Frankfurt, Germany Toronto, Ontario, Guadalajara, Mexico Canada DESTINATIONS London, United Kingdom Tokyo, Japan Puerto Vallarta, Mexico Vancouver, BC, Canada

Source: Greater Portland Inc, 2018. TAXES

TAX TAXING ENTITY RATE CREDIT, ABATEMENT, EXEMPTION OR REFUND Sales Tax None - - Corporate Oregon Dept. 6.6% on corporate income <$1 million; 7.6% 100% sales factor Income Tax of Revenue on income >$1 million Personal Oregon Dept. For persons filing single or married/RDP filing Income Tax of Revenue separately—If your taxable income is $50,000 or more but not over $125,000. your tax is $4,264 plus 9% of excess over $50,000 If your taxable income is over $125,000 your tax is $11,014 plus 9.9% of excess over $125,000.

For persons filing jointly, head of household, or qualifying widow(er) with dependent child— If your taxable income is $50,000 or more but not over $250,000 your tax is $4,028 plus 9% of excess over $50,000 If your taxable income is over $250,000 your tax is $22,028 plus 9.9% of excess over $250,000 Payroll Tax TriMet Transit 0.7537% of total payroll District Unemployment Oregon Dept. Average rate of 2.4% on first $38,400 in of Revenue wages Workers Oregon Dept. Average rate is $1.28 per $100 payroll Compensation of Revenue City of Portland City of 2.2% of the net business income Businesses Business Portland grossing less than License Fee / $50,000 per year Tax from all sources before expenses are exempt

Economic Development Programs Portland’s Smart City Initatives • Business Expansion Program • Traffic Safety Sensor Project • Strategic Reserve Fund • Biketown • Enterprise Zone • Parking Kitty • On the Job Traning Grants • Portland Urban Data Lake • Urban Renewal Program • Smart Autonomous Vehicle Initiative • Energy Tax Credits • Smart City Challenge • Opportunity Zone • Vertical Infrastructure Strategic Framework • Connected Streetcar Project • Infrastructure Monitoring Project

Source: Greater Portland Inc., 2018. 19 THE PORTLAND TECH STORY

Authors Ashley Connor Senior Research Analyst CBRE

Amy Jauron Director of Business Development Greater Portland Inc.

Design Helena Chien CBRE CONTACTS

Matt Miller Senior VP of Business Development Greater Portland Inc T +1 503 445 8065, ext. 109 [email protected]

Jason Green Managing Director CBRE +1 503 221 4810 [email protected]

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