det-The Madison rooftop event space, 2015. The rooftop deck of the Madison in downtown Detroit. The building had closed in 1984, but Dan Gilbert’s Bedrock Ventures bought it in 2011 and turned it into a tech incubator.

CHICAGO, DETROIT—Chicago ranked #15 on CBRE’s Tech Talent Scorecard, part of its fifth annual Scoring Tech Talent Report, which ranks 50 US and Canadian markets according to their ability to attract and grow tech talent. The report, which can be viewed in detail by market in the interactive Tech Talent Analyzer, finds that strong demand for talent that offer specific skills, such as software development, coupled with a tight labor supply, has driven companies to locate in markets with the largest concentrations of high quality talent.

And Detroit was one of the big surprises on the company’s scorecard. The city has a rising downtown that has filled up with office users, including many tech firms, and that helped it hit #21 among North American markets. Tech employment there now stands at 78,510, a 40.7% increase from 2011. The non-tech sector grew by 18.9% in that time period.

“We’re now seeing young people, both right out of college and in their late twenties, settle in the CBD, Midtown, and the collar areas,” Jamie Dingeman, senior vice president with CBRE, tells GlobeSt.com. “Just ten years ago, most in these groups would have ended up moving to Chicago or New York. These days, they’re coming to Detroit.”

The city has seen a 9.2% increase in its population of 20-29-year-old residents since 2010, making it number six in terms of millennial population growth in large US cities, according to the study. And with a vacancy rate around 2%, the competition for apartments in or near the downtown has gotten quite intense, even though developers have recently created thousands of new units.

The auto industry has certainly played a role in fostering a local tech scene, Dingeman adds, as many new firms provide components and services to the Big Three. But “the health of the CBD’s tech sector is not due to any one particular industry,” and many other tech companies work in the medical field or other services.

CBRE determines the tech talent rankings based on 13 unique metrics including tech talent supply, growth, concentration, cost, completed tech degrees, industry outlook for job growth, and market outlook for both office and apartment rent cost growth.

The top 10-ranked cities on the Tech Talent Scorecard were all large markets, each with a tech labor pool of more than 50,000. The San Francisco Bay Area, Seattle, New York, Washington, DC, Atlanta, Toronto, Raleigh-Durham, Austin, Boston and Dallas/Ft. Worth made up the top 10.

Detroit stood out in a number of key areas:

  • Wage growth increased 9.4% from 2011-2016, with a current average of $83,482.
  • Detroit saw a 21% increase in tech degrees from 2011-15, growing to an annual 4,608 annual completions in 2015.
  • The city has also added 1,555 more tech jobs than graduates during the past five years.
  • Detroit’s office rents increased 5% to $18.40 and vacancy declined to 16.7% from 26.9% in the first quarter of 2012.

“The office market is as healthy as its been in years,” Dingeman says. The once-high vacancy rate began plunging when Dan Gilbert’s Quicken Loans and other local firms began buying and investing in downtown properties. Since 2011, Quicken and its family of companies have bought up more than 80 downtown properties, many of them 75 to 100 years old, the type of structure most favored by tech-savvy millennials. These once-underutilized structures now host about 13,000 workers every workday, and developers have recently begun renovating building farther out from the CBD in neighborhoods such as Midtown.

“It’s our hope from an occupier perspective,” Dingeman says, “that these tech firms continue to grow and further enhance Detroit’s reputation.”