Head to the Burbs!
Companies were looking in suburban areas for real estate properties prior to COVID-19, but the pandemic has accelerated that shift. Suburban areas have gained momentum, as they not only look more appealing but have lots to offer as well. One of the driving factors is that as millennials age they are transitioning to the next phases of their lives- starting families and purchasing their first homes. Millennials are moving from urban core to suburban areas as they look for more affordable living cost and greater access to good school systems for their children. For a lot of them, staying home has exacerbated that shift and accelerated the exodus to the suburbs.
COVID has changed the workplace both right now and for the near future. With the need for social distancing, the glorious era of office densification is over, at least for now. COVID has proven that density and health are no longer compatible.
However, this is not the end of open offices or offices in general, as some may claim! The workplace is not going to go away! According to a population survey done by Gensler, “only 12% of the workforce would like to work remotely full time.” So there is definitely a need for a mix of workplace alternatives. Numerous offices are now using a collaboration hub, where employees come to the office for collaboration but also work from home. Teams that work on site, are doing so in shifts.
Social distancing has forced everyone to rethink the workplace. Companies need more space as they decide how to bring their workforce back to the office.
For many years, we have observed a corporate exodus to the cities. It would appear, that pendulum is now swinging the other way and are we seeing a move back to the suburbs. The suburban offices are making a recovery because of their single biggest advantage, namely, larger spaces. The larger floorplans found in suburban areas offer more flexibility within the available space and can more easily accommodate future growth and reorganization as needed.
Part of the acceleration for suburban campus uptake is that developers have learned what has worked for urbanization development and have recreated those attractive elements of the urban experience in suburban settings. This is a key element in attracting prospective tenants. Amenities and creating a sense of community are key to attracting talent and it is driving companies back to the suburbs. In the past, most suburban campuses were isolated and the opposite of a magnet for attracting quality talent. This has change dramatically, going from very boring cookie-cutter, isolated campuses to vibrant places with a modern, hip vibe.
Another unintended consequence of COVID 19 that has helped suburban areas to look even more desirable, is that many commuters are shunning mass transit. That means that more people will be driving to work. This of course creates a demand for parking and right now only suburban areas can accommodate such a large influx of cars.
At this moment lots of company are pivoting and have a lot to figure out, but one thing is for sure: the suburban area is gaining momentum for residential and commercial purposes and we should closely monitor this trend.
Gensler: U.S Work from Home Survey 2020