These days, all you hear about is how millennials are settling into urban areas that are central to their work and entertainment options. While this is true, for the most part, the decline in suburban office real estate is mostly fear mongering and misguided speculation. In fact, one recent study conducted by CBRE found that suburban offices in the United States and Canada are doing fairly well and are even expected to grow in 2018. But what is driving an increase of suburban workspaces?
While it is certainly true that many young professionals are enjoying the urban lifestyle, they are also waiting a bit longer to get married and have kids. They’re loving the urban lifestyle longer before heading out to the suburbs to start a family. And what better place to raise a family in a suburban area where there’s more space, less congested streets, and usually a cheaper cost of living? But … even in the suburbs, they’re looking for perks.
Accessibility Also Matters
Along with entertainment, another reason why millennials are settling down in urban environments is accessibility. Public transportation, bicycle lanes, and pedestrian-friendly cities are all attractive to the young professional who doesn’t want to sit in traffic when heading to and from work. Historically, this has been an advantage that cities had over the suburbs. But more recently, with the drive towards transit-oriented development in suburban areas, the advantage that the city has over the suburbs won’t be so profound.
Studies show that some suburban office settings have been extremely successful, but not all. And one of the major things that determine whether your suburban workspace will float or sink is accessibility. Suburban office spaces that had a more urban feel to them tended to be better received than those that didn’t. And by that, I mean offices that were easy to walk to and have nearby restaurants, shopping centers, and other amenities that could be easily accessed without having to drive 15+ minutes down the road.
A younger-than-me friend of mine recently purchased a home as far away from the city center as she could while maintaining fast Internet. Yes, you read that right. However, she said the choice was made easier because the suburban neighborhood she chose also had five-star amenities like restaurants, shopping, a world-class gym, hiking trails and more … all just minutes from her front door.
If this is the new look of young professionals, wouldn’t it behoove us to consider the suburban office?
Don’t Count the Suburbs Out Yet
With the way contemporary society is changing, it’s likely that we’ll see the more growth in the suburbs over the next few years.
One driving factor behind growth in the suburban market is believed to be an increase of remote working which has created a bigger demand for shared office spaces. Another important thing to remember is that millennials aren’t a monolithic group – there are just as many millennial families looking to settle down in a quiet suburban neighborhood as there are those who seek out a fast-paced urban lifestyle. In fact, you might be surprised to learn that roughly 70% of millennials see themselves settling down in the suburbs at some point.
My friend always thought the urban lifestyle was for her … until she found a suburban neighborhood with all the perks PLUS the quiet streets and mature landscaping of her dreams.
Is moving an office to the suburbs a safe investment?
All things considered, there are no guaranteed wins in the real estate industry. With that said, suburban real estate that’s central and easy to access is (and always will be) a smart investment – especially with ridesharing companies like Uber and Lyft making it easy for people without cars to get to and from work.
So, like everything in life, you need to believe it before you see it. Remember the old adage: “Build it and they will come!” As far as I can see, the suburbs will always play a strong role in the real estate business.