Urban office, 2.0: The American workplace returns to the city

American companies are moving corporate offices out of the suburbs and back into cities.
Written by Andrew Nusca, Contributor

Americans are hanging up the post-war idea that the workplace must be located in a faceless corporate park in the suburbs of the city, a la television series The Office.

Workers are returning to the city.

A new Wall Street Journal report details a new trend in which cities -- even down-on-hard-luck ones, like Detroit -- are seeing companies move corporate offices from the 'burbs to downtown, despite higher rent, crime and a longer commute.

The shift is different than previous economic recoveries, where the suburbs bounced back even stronger. Since early 2009, major metropolitan areas such as Los Angeles, Houston, Denver, Las Vegas, Miami, Washington D.C., Pittsburgh and Phoenix consolidated suburban offices in the city.

In many ways, it's a backlash to America's worst suburban sprawl offenders.

First, a few statistics from research firm Reis, as quoted in the Journal:

  • Suburban office markets were hit harder by the recession than their downtown counterparts.
  • The national office vacancy rate in downtowns was 14.9 percent at the end of Q3 2010. In the suburbs, it was 19 percent.
  • The suburbs are hemorrhaging occupied office space -- 16 million square feet in the first nine months of 2010.
  • Still, most American white collar jobs remain in the suburbs, by a factor of two.

In most of the cities cited, both downtown and suburban areas reduced occupied office space, but the suburbs fared much, much worse.

In New York City -- an extreme example, and no doubt an anomaly in many ways -- downtown actually gained 1.8 million square feet of occupied space, while its suburbs lost 1.4 million square feet.

The term "secular shift" is being tossed around to describe the transition from office park to skyscraping tower.

Is it a return to the city by Baby Boomers, or a migration to it by suburban-born Generation Y workers?

This post was originally published on Smartplanet.com

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