The best office location depends on many things—your business needs and goals, your budget, workforce, commute times and client or customer-facing access, to name a few. Office locations in the suburbs and in urban areas have a host of benefits. Rather than focus on the ‘cons’ of each, here are the positive implications of establishing your next office location or headquarters in urban and suburban areas.
Benefits of a suburban office
Growing talent pool. We are seeing a mini housing bubble in some suburbs which could indicate that people moving outside of urban areas will look to work in these same suburbs to which they are moving.
Potential for lower rent. Depending on the submarket, urban office locations can have higher rent costs and overhead than suburban locations. Taxes and operating costs can be lower in suburban areas as well. Of course, there are many variables over time impacting rates including vacancy rates, and supply and demand, but as it costs more to build downtown that is usually accompanied by higher rents.
Local presence highlight. If physical signage and drive-by branding or visibility is important to you, a suburban office space may present better marketing options than urban spaces.
Ample parking. Downtown, urban offices have limited parking options on site and parking that comes at a cost to employees and employers. Suburban areas and office parks typically offer convenient surface and structured parking options that are free.
Benefits of an urban office
More mass transit options. While the current number of people using public transportation is lower due to COVID-19, in the grand scheme of things, urban settings offer more transportation options which is a bonus for both your employees and potential customers/clients.
Higher density of people. Urban areas with significant residential present an opportunity for easier access to a diverse talent pool in close proximity to the workplace. This can create an opportunity to build a diverse culture resulting in a rich mix of ideas and collaboration.
Live, work, play mentality. We do still see large corporations in urban areas where they can continue to live, work and play in one central location. Large suburban campus development is occurring less often and it’s not likely that larger companies that are currently in a central business district will move out to the suburbs anytime soon.
One-stop shop. Take a walk to your favorite lunch spot. Knock off some errands on a break. Meet up with a colleague in the next building over. Urban office locations make it convenient for employees to experience more than just work while in the downtown area.
A change in the workforce
As we saw with COVID-19, teams moved to agile workflows and pivoted to remote work environments. When thinking about your next commercial real estate move for business, consider what your physical workspace needs to look like to accommodate a growing team and consider the impacts if you are moving to a hybrid model of work. We do predict that highly productive teams will make their way back to office settings in the near future whether on a full-time or part-time basis
Additional benefits to consider and closing thoughts
A benefit for both suburban and urban office areas can be in the form of government incentives at both the local and federal level. Incentives vary and are typically tied to aligning with a community’s goal of increasing its tax base or opportunities for jobs. For more information and ideas, see our “Real estate grants and incentives” post. Working with a knowledgeable real estate professional and keeping close tabs on your local Department of Employment Economic Development may sway your location decision depending on current funding available.
At KimbleCo, we represent clients in both urban and suburban areas and our current listings reflect options in both. If you need help vetting the best location for your company, we’d be happy to jump on a call or set up a meeting. We are here to help you navigate your commercial real estate journey.