In urban centres across Canada, there are those business parks in the suburbs.

Columnist John Clark.

You know the ones. They have a diner/café that caters to the morning coffee and lunchtime crowd. Probably some sort of fitness club that woos neighbouring employers with a staff discount.

By 5:05 pm, they’re ghost towns.

These have often been the stomping grounds of technology companies eager to take advantage of more flexible and economical real estate options than could be had in the urban core.

In cities with strong clusters of such companies, they’ve fuelled the growth of suburban neighbourhoods and demand for big-box retail.

Take Ottawa, for example

Ottawa’s status as “Silicon Valley North” through the 1990s was primarily driven by what was happening outside the municipal boundary of the old pre-amalgamation city. The hotbed was out past the Greenbelt, at the north end of the then-separate City of Kanata.

Kanata itself had begun in the 1950s as a single housing development by a local developer named Bill Teron.

As BOMA Ottawa related in the 2016 edition of its local commercial space directory, that first neighbourhood soon proved popular with employees from the nearby campuses of Bell-Northern Research, the Communications Research Centre of Canada and Canada’s first semiconductor company, Microsystems International.

By the late 1970s, the future “Sir” Terrence Matthews and partner Michael Cowpland had joined the growing tech hub with the first incarnation of Mitel Networks. Matthews would come to found and/or fund 100 tech companies, many of them based in North Kanata.

Despite the telecom bust of the early 2000s, Kanata North remains Ground Zero for most of the communications R&D in Canada. It boasts a growing number of startups and ambitious mid-sized companies active in other sectors, such as cloud computing, autonomous vehicles and streaming video software.

Times are changing

The local economic development agency, Invest Ottawa, years ago relocated from the Kanata area to the downtown core. Its new Bayview Yards Innovation Hub is located on the edge of LeBreton Flats – 53 acres of fallow land about to undergo a multi-phase, multi-billion-dollar redevelopment.

Another resident of Ottawa’s urban core is Canada’s e-commerce star, Shopify. It has continued to expand its global HQ downtown.

A recent story in the Ottawa Business Journal quoted local commercial real estate players about the “Shopify Effect,” as a growing number of tech companies move downtown to fill space left vacant in recent years by the federal government. It’s a “tech migration that is driving a sea change in the downtown market.”

At a recent breakfast event I attended at Ottawa City Hall, Invest Ottawa CEO Michael Tremblay told the story of a high-tech hub that launched and sputtered in Burnaby B.C., but did much better after it relocated to downtown Vancouver (real estate costs notwithstanding).

Rise of the high tech Hub

Head over to the website of Toronto’s MaRS Discovery District, and there’s a promo to download a report, Rise of the Hub, which argues, “Breakthrough products now emerge in places where people working in different sectors meet and chance encounters can spark creative ideas. Revitalized, resurgent cities are becoming the drivers of startup creation and a new economic engine is emerging: the innovation hub.”

However, all this begs the question: What is a “revitalized and resurgent” city?

The folks at the Kanata North BIA would certainly argue their community has plenty of appeal that is lacking in a crowded and noisy urban core. On the other hand, some people thrive on that hubbub. It all depends on what kind of lifestyle you want to have.

ITBusiness.ca published a feature a few weeks back that looked at York Region, north of Toronto. Despite all the press Toronto gets about investment from Google and being the only Canadian city to make the shortlist for Amazon’s HQ2, it is York Region which boasts the highest concentration of high-tech employers in the country.

Finding the Goldilocks Zone

According to editor Brian Jackson, York Region is in the Goldilocks Zone: “It’s not too far from Toronto, the office space is much cheaper than what’s found in the megacity, and the well-educated worker base can actually afford to buy the real estate near their office.”

What’s interesting to note about York Region is that, while it does have a roster of startups, its tech sector is heavy with the Canadian arms of established multinationals.

Affordability, convenience and that stubbornly subjective concept know as “quality of life” are the factors determining where growing tech companies, and even the Canadian branches of multinational heavyweights, set up shop.

Ottawa is a great example of a city with two distinct tech centres which are both thriving thanks to different demographics of knowledge worker. It’s a tradeoff between where people want to live, how much of an ordeal they are willing to endure to get to work, and how much the demand for their skillset gives them the upper hand over a prospective employer.

Where does the talent you need want to live?

This push and pull will only accelerate as the economy, and different growth industries of our tech sector, gain steam and the war for talent intensifies. Are you an employer after young hotshot talent, or a package of skills and experience more likely to reside in an older worker with a family?

The answer to this question, more than any other, may drive whether you locate in the urban core or the ‘burbs.

People want to live close to where they work.

Where does your target workforce prefer to live?

To discuss this or any valuation topic in the context of your property, please contact me at jclark@regionalgroup.com. I am also interested in your feedback and suggestions for future articles.