CREJ - Office Properties Quarterly - March 2016
Ever since the first settlers stopped on the banks of Denver’s South Platte River, the river has been a source of commerce for its inhabitants. Whereas back then it was used for agriculture, today the river banks are occupied by creative technology companies working in innovative redevelopments of historic buildings to help fuel record growth in Denver’s technology sector. Denver’s expanding tech scene has paved the way for a new subindustry in town – one that not only pays homage to the city’s agricultural history but also embraces one of Colorado’s next frontiers in the world of technology. Denver is poised for growth in “ag-tech,” short for agricultural technology, thanks to our agricultural roots, interest from capital investors, infrastructure investments and innovative tech culture and talent pool. Ag-tech can be defined in a variety of ways. In general terms, it includes any company using technology to increase efficiency and bring about change within the agricultural world. Ag-tech helps drive the best yield for the lowest amount of input and requires constant innovation, sparking growth among this new category of technology. The investment world has seen this potential for growth and responded by increasing investment in ag-tech by 170 percent in 2014 with $2.36 billion invested across 264 deals. The first reason Colorado is poised for ag-tech growth is because of our agricultural foundation. Some older Coloradoans may like to reminisce about the “cow town” days, but the truth is the agriculture industry still is alive and well in our state. According to Colorado.gov, the agriculture industry contributes $40 billion and provides 173,000 jobs annually. A second factor complementing the growth of ag-tech is the fact that the state is already a target for tech capital. In 2014, $488.5 million was invested in tech-related Colorado companies with $215.6 million infused in fourth-quarter 2014 alone, according to 2015 CBRE Colorado Tech Book – Changing Landscape of Tech Real Estate in Colorado. Third, as a community Denver has demonstrated a willingness to invest in infrastructure related to its agriculture and tech industries. This includes November’s successful ballot measure to expand the National Western Complex, home to the National Western Stock Show. Just south of the complex, another investment is underway as renovations have begun on Brighton Boulevard. Often positioned as the next gateway to downtown, Brighton Boulevard and the surrounding River North neighborhood are a hotbed for Denver’s startup and tech culture. The area presents an interesting convergence of Denver’s agricultural history and its innovative tech scene. Finally, Denver is well positioned to embrace the industry because of our innovative and supportive tech culture and desirable talent pool. “There are so many free or inexpensive programs, organizations and mentors available to people looking to get into tech in this state in addition to grants through programs like the Office of Economic Development and International Trade,” said Robert “RT” Barcik, from Fresh Cow Manager, who uses new technology to improve the health and efficiency of dairy and beef cows. “These resources help tech companies grow much faster.” The supportive startup culture – combined with the overall growth of Denver’s economy and the state’s reputation for work-life balance – is attracting a boom of educated workers. Denver’s high-tech job market grew by 10.7 percent from 2012 to 2014, according to the 2015 CBRE Tech Talent Report, which measures the top technology markets across the country. This labor force is not only helping to supply growing companies with top talent but also attracting new businesses to the area. Wayne Lambert of Sage Insights, a joint venture between data intelligence firm DN2K and John Deere, recognized the importance of access to strong talent pools when his company was choosing a location. “Talent is a big draw, and Colorado seems to be a more acceptable alternative to Midwest-based companies versus the coastal markets,” he said. In summary, Denver combines many elements helpful to fueling an ag-tech market – from a historical foundation in agriculture to interest from capital investors to significant infrastructure investments and a supportive tech environment and talent pool. Will we become the “Silicon Valley for agriculture in the 21st century,” as Greg Gaff of Colorado State University said in a November 2014 report with the Department of Agricultural and Resource Economics and the Office of Engagement? Only time will tell, but we are slipping on our cowboy boots and preparing for the ride.