What forces are compelling companies to relocate closer to Chicago’s Central Business District? Most prominent may be the deep labor pool stocked with Millennial workers who want to live downtown, says NGKF vice chairman Steve Levitas (pictured below with his children in Park City, UT), who advises companies on whether and how to make the big move.
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A key benefit attracting the Millennial contingent is the accessibility provided by the L and other public transportation available downtown. Firms also benefit from two key localization economies, knowledge spillover and input sharing, synergies enjoyed by clusters of companies in similar sectors. Further, the quality of highly amenitized Class-A and B office buildings has improved dramatically in the past decades, and the substantial fitness centers, work café and WiFi lounges, once reserved for the top echelon of buildings, are becoming commonplace.
Steve's also acutely aware of the challenges firms face when leaving the suburbs, principally high and rising rents, with climbing taxes and operating costs making the city even more expensive. Another consideration, with vacancies shrinking to the historically low 12% range, is whether companies can feasibly compress the SF/employee ratio—density has already doubled nationwide in the past six years. This means fewer private offices and more collaborative and flex space.
Still, for many, the benefits outweigh the costs. To learn more about Steve, click here.
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