Tuesday, December 14, 2010
For decades the trend in most American cities has been one of jobs moving from downtowns to the suburbs. A recent Wall Street Journal piece suggests that this trend may be shifting: Downtowns Get a Fresh Lease: Suburbs Lose Office Workers to Business Districts, Reversing a Post-War Trend. From the article by Anton Troianovski:
As the market for office space shows signs of recovery, the suburbs are getting left behind.
For decades, the suburbs benefited from companies seeking lower rent, less crime and a shorter commute for many workers. But now, office buildings in many city downtowns have stopped losing tenants or are filling up again even as the office space in the surrounding suburbs continues to empty, a challenge to the post-war trend in the American workplace and a sign of the economic recovery's uneven geography. . . .
Statistics show that suburban office markets were hit harder by the recession than their downtown counterparts and are recovering more slowly. The national office vacancy rate in downtowns was 14.9% at the end of the third quarter, the same level as in early 2005—while the suburban vacancy rate hit 19%, 2.3 percentage points higher than in 2005, according to data firm Reis Inc.
In the first three quarters of this year, businesses in the suburbs vacated a net 16 million square feet of occupied office space—nearly 280 football fields—while downtowns have stabilized, losing just 119,000 square feet.
You might argue that simply losing fewer square feet than the suburbs (where the harder-hit industries such as mortgage lending and home building tend to be located) doesn't necessarily presage the long-awaited Return to Downtown. But real estate guru and urbanism advocate Christopher Leinberger detects something bigger going on:
[S]ome scholars, urban advocates, and developers believe a secular shift is under way in the American workplace.
"Young people don't want to be out on the fringe...and as people are beginning to figure that out, it's beginning to get factored into office relocations," said Christopher Leinberger, a real-estate developer and a visiting fellow at the Brookings Institution. "It's a major structural trend that we in real estate are going to have to adjust to."
The WSJ article has lots of links to photos, data, and interactive maps. Thanks to Houston Tomorrow for the pointer.
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