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The tech industry places a high premium on recruiting, and for good reason. It can cost $30,000 in fees to attract and engage a software developer, and large Seattle-area firms – like Amazon and Microsoft – hire hundreds of IT professionals each month. High stakes, high volume activity has helped create a $35 billion recruiting market in the U.S.

Tech firms are finding that the “built environment” – which includes everything from office layout to the surrounding parks, neighborhoods and public transportation systems – is one of the keys to attracting employees. For example, Twitter’s new headquarters on Market Street in San Francisco features a yoga studio, a rooftop garden and an arcade. And, pedestrians walking through Seattle’s South Lake Union neighborhood don’t even realize they are passing through Amazon’s corporate headquarters, which is surrounded by restaurants and open courtyards.

To remain competitive, tech firms are relocating their offices back to urban and transit-connected districts. Those that don’t keep up risk losing the talent base that they’ve worked so hard to acquire. Given that dynamic, here’s what works and what matters to the tech industry:

Proximity to Amenities: Concur, a leading provider of business travel and expense management solutions, recently moved from the exurbs to downtown Bellevue, Wash. — paying three times more per square foot. The company’s rationale was specific: To help recruit and retain the best employees who actively seek urban experiences, transit and a variety of casual dining options.

Open Offices: Google conducted extensive time and motion studies to identify how to foster serendipitous interactions among their many bright employees. Today, Google and other tech firms prefer 30,000 square foot floors (or larger) to enable more than 200 workers to occupy and interact closely. Companies also want column-free spaces to enable line-of-site interaction, and high ceilings to provide more daylight and to enable the use of indirect lighting.

Focus on Outdoor Activities: HR managers at Microsoft say that new employees negotiate to work in buildings with showers, lockers and bike storage to accommodate active lifestyles. While foosball and ping-pong tables were common during the dot-com boom, the focus has moved to urban parks, trails, off-leash areas and active recreation spaces.

Classic, Efficient Design: The most successful urban neighborhoods follow centuries-old design principles. Walkable grids with transit at the center and nothing more than a 5 minute walk from the train station. Green spaces, gathering places, diverse local retail and casual dining, not national chains, help spur civic engagement and street culture. These design principles are the basis of new neighborhoods like The Pearl District in Portland, The Mission District in San Francisco and LoDo in Denver.

Twenty five years ago, the common design philosophy was to appeal to tech professionals’ familiarity with college campuses by recreating a similar environment. This worked well when employees were tethered to their desktop computers, but that is no longer the case. Employees today, on average, want to live and work downtown near an assortment of urban amenities.

Greg Johnson is president of Wright Runstad & Co., an urban development company that is building the Spring District in Seattle.