When Derek Orr left Microsoft last fall to join Uber in its new Seattle office, he was one of a handful of Uber employees who ate lunch at a makeshift picnic table in a small Pioneer Square office. Earlier this year, Uber moved into a 40,000-square-foot office downtown that includes expansive murals of Northwest-style landscapes and a proper cafeteria where its employees, now numbering 150, can dine in style.
By the end of this year, San Francisco-based Uber expects to have nearly 200 employees in Seattle, and it’s looking to enlarge its office — already the size of the average grocery store — by 50 percent.
The fast-growing Seattle office seems more like a startup than the Northwest outpost of a global company. Uber’s Seattle office is “empowered to work autonomously,” says Orr. “They’re there when we need them,” he says of the people at the home office, “but we do not have to wait for a decision from San Francisco.”
Uber is one of more than 80 companies headquartered outside the region that have established offices here so they can better recruit from the deep pool of software engineers.
“Seattle, arguably, is the fastest-growing tech hub in the country,” Orr asserts. “There are a lot of companies to draw amazing talent from.”
ROOM TO GROW: Derek Orr, left, and Jon Kantrowitz work at Uber's new office in the Second & Seneca Building downtown.
Uber expects to have 200 workersin Seattle by year's end.
Eighty satellite offices may not seem like many, given that there are some 12,000 tech firms in Washington state. But the number of branches has grown dramatically in recent years, and they tend to include the world’s most successful companies with astonishingly rapid growth trajectories.
More than half of the engineering centers have been established since 2014, according to GeekWire, the Seattle-based tech news service. While they typically start small, many have grown quickly and now play strategic roles for such global giants as Google and Facebook.
The Seattle tech community, once described as Snow White and the Seven Dwarfs because of the overwhelming presence of Microsoft, has gradually become more diversified with the emergence of Amazon and numerous midsize companies like Tableau Software and F5 Networks. The new engineering centers add yet another important source of growth and variety.
Consequently, the tech sector has become a key driver in boosting the demand for commercial real estate. During the past year, tech companies leased 2.5 million square feet in the Seattle area — the equivalent of about 17 Costco stores — with South Lake Union, downtown Seattle and downtown Bellevue representing three of the six hottest tech neighborhoods in the country by transactions, according to JLL, a real estate research firm.
Much of this activity comes from satellite offices that were established earlier and are now expanding. Facebook, which set up shop in Seattle six years ago, currently has about 1,000 employees and has moved into new offices in South Lake Union that could accommodate twice that number.
“The city [of Seattle] has greatly contributed to our engineering growth,” says Vijaye Raji, Facebook’s director of engineering in Seattle.
Google, which recently completed a large campus in Kirkland, has 1,900 employees and is adding a new building in South Lake Union that will give the company the capacity to triple that number.
While Facebook and Google both started out with just 20,000 square feet or so of office space, Bret Jordan, managing director of the Bellevue office of real estate services firm Colliers International, says they now represent a significant presence in the region.
“Those second and third moves are the ones that have a significant impact on our office market,” he says.
And it’s not just the Silicon Valley tech giants that are choosing to establish engineering operations here. Chinese e-commerce behemoth Alibaba opened an engineering office here two years ago. Taiwanese smartphone maker HTC, Chinese telecommunications giant Huawei Technologies, Japan’s Mitsubishi Aircraft Corporation and French defense giant Dassault Systems all have software engineering operations in the Puget Sound area. There are also edgy startups like virtual-reality firm Magic Leap, Singapore’s GrabTaxi and Elon Musk’s SpaceX.
The companies are attracted by the Seattle area’s concentration of software engineers, who constitute a talent pool of more than 90,000, according to a 2015 Washington Technology Industry Association (WTIA) report.
“We have more software engineers than any city per capita in the nation,” says Suzanne Dale Estey, CEO of the Economic Development Council of Seattle & King County.
And even though Silicon Valley is by far the leader in venture capital funding, WTIA CEO Michael Schutzler says, “For actual engineering talent, for software development, this is the center of the universe.”
Yet it’s not just about quantity. University of Washington Computer Science & Engineering Professor Ed Lazowska points out that Seattle area engineers are in the vanguard in a broad range of sectors, from cloud computing and e-commerce to online gaming and virtual reality.
“We are, honestly, in a different league,” says Lazowska. “It’s Silicon Valley and Seattle. New York has an extremely vibrant startup culture, but it is much less of a magnet for engineering offices.”