Debunking The Myths Of Suburban Office Leasing
While it’s true more companies are flirting with downtown moves to court and attract a younger workforce, a read past the headlines indicates the suburbs are more than holding their own—in fact, many suburban markets are thriving.
A recent report from JLL separates fact from fiction in suburban office markets. JLL research director Christian Beaudoin and SVP Todd Schaefer (pictured with JLL managing director Sean Reynolds, right) say this report serves as a reminder of the stability found in the suburbs. Let’s take a look at some of the myths they debunk.
Myth No. 1: All Millennials Want To Live In The City
Fact: A JLL/Choose DuPage survey found that 48% of Millennials working in DuPage preferred working in the suburbs. What these younger workers do have a problem with is commuting to work. The survey also determined that 53% of respondents wanted alternatives to driving to work, and 46% of Millennials are commuting more than 45 minutes to their jobs. Christian says office landlords are exploring options such as shuttle services to Metra stations, but that this becomes harder to subsidize the farther out of the urban core workers travel.
Myth No. 2: Companies Moving Downtown Shun The Suburbs Completely
Fact: Of the 22 suburban companies whose moves to the CBD made headlines last year, 77% of them also opened or maintained a suburban presence. Todd says the main reason for this dual-location strategy is not only to attract and retain Millennial talent, but to be closer to potential clients. Christian adds another advantage is to provide options for workers in different job functions. While a downtown office presence may be right for sales, tech or creative positions, a suburban office (where rents and labor costs are lower) can be appropriate for call centers and back office operations.
Myth No. 3: Suburban Office Markets Have Been Slow Over The Past Four Years
Fact: Aon, Zurich and Zebra Technologies have accounted for three of the four largest lease transactions in the suburbs, and companies committing to leases over 50k SF the past four years accounted for more than 13M SF of transactions. Growing companies see value in these markets as destinations for their businesses, which Todd says is a testament to the suburbs.
Myth No. 4: The CBD Presents Better Opportunities For Tenants And Investors
Fact: The city and suburbs benefit equally from easy access to O’Hare and Midway International Airports, growing tourism numbers, and Chicago’s position as a logistics hub. Christian says tenants and investors don’t have to subscribe to an either-or scenario and that working together, both Chicago and the suburbs provide excellent opportunities for companies and employees.