Downtown or Suburban?
November 22, 2016
- In recent years, there has been an uptick in corporate relocations back to urban settings
- Why? Because those companies are finding that, if they need to attract millennial workers, it’s necessary to be where they are.
In the previous half century, downtown areas have seen a mass exodus as corporations closed up shop and moved to suburban areas where land was cheaper and employees could enjoy family-friendly, suburban lifestyles.
While suburban locations still have broad appeal, there has been a noticeable trend moving in the other direction. Since 2015, a growing list of companies have left the greener suburban pastures to move back downtown.
Why are some companies deciding to go back downtown?
As with any smart relocation decision, strategy is the key driver. For companies who need to attract a tech-savvy, young workforce, the move downtown can make it easier to reach their goal.
Millennials are waiting longer to marry and start families, preferring a hip urban location to family oriented suburbs. Features like public transportation, walkable or bike-able paths and other lifestyle considerations attract this new generation of workers. Young, college-educated workers are also intensely public spirited, and many are enticed by the idea interacting in the community in a way that makes city living attractive.
For companies considering urban relocation, cities across the country are offering tax incentives in an effort to lure jobs and economic development. While the availability of tax rebates, etc., is typically not the primary driver in relocation decisions, it can tip the scales when weighing two fairly equal options. Several high profile relocations in recent years, notably the GE move to downtown Boston and Marriott’s move to downtown Bethesda, Maryland, involved generous tax incentive offers.
However, it’s important to note that New York offered GE a better incentive package, but other considerations tipped the decision in favor of Boston.
So, does this mean we can soon expect to see suburban office parks as deserted as some downtown areas were a few years ago?
The new interest in downtown relocations is not a tsunami that will sweep away the suburbs. On the contrary, suburban locations still offer real value and appeal to business decision makers. However, for some companies, a move downtown is the right one.
Is your company considering a move? Would you like to explore options that include moving downtown?
Give us a call!
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