While traditionally city centers have been occupied by finance, insurance or publishing companies, in recent years and in markets across the globe we have seen an overall shift to technology companies such as e-commerce, digital start-ups and high-tech setting up in those spaces. 

In this blog below we look at some reasons why tech companies are overtaking downtown cores and the impact this has on cities.

Attract talent

Tech companies seek to employ young talent who are often located in city centers and seek the lifestyle that big, urban centers have to offer. City centers are attractive places for young professionals due to amenities they can offer and support their fast-paced and social lifestyles.

As urban cities attract young professionals, so do young professionals attract services that make city centers more attractive places to be as they cater to this audience with fitness facilities, bars, restaurants and entertainment.


Many regional and local governments offer tax breaks, grants and other financial incentives to encourage the development and growth of technology businesses in their jurisdiction. These incentives can have a significant impact on commercial real estate as they can influence the location and expansion decisions of technology companies. 

This growth and demand in expansion of tech businesses can drive demand for commercial real estate not only in offices, but also businesses that offer amenities to workers such as retail outlets, restaurants and fitness facilities. This can also have an impact on surrounding areas as businesses and employees look for housing and other services near the company’s location. 

Revitalizing neighborhoods 

In some city centers tech companies are attracted by adjacent neighborhoods which offer cheaper rents, but are near central spots in the cities. As a result employees of these companies settle in the area and attract new businesses that revitalize these neighborhoods. 

The effects of these smaller and bigger technology companies will generally raise the living standard and benefits – there will be more career opportunities, as well as improved entertainment and other amenities – these do not always equally apply to long-term residents of the neighborhood. Many long standing inhabitants can be priced out of new local establishments and with rent increase, some might have to move out of the area to look for more affordable accommodation.

In summary, there are multiple reasons why technology start-ups are taking over downtown cores, and the impact of those can be both positive and negative on local communities and businesses. This however mostly depends on the policies and regulations and cities put in place to manage growth and ensure equitable spread of benefits for all its residents.