The Cities are Hot, The Suburbs are Not
The world of commercial office space is changing. The questionsis not only how it’s changing but where?
In the 1940’s and 1950’s, returning GI’s left the cities to buy their dream homes in the suburbs. The developers were more than happy to accommodate and thus began the suburban sprawl. Office buildings were built to accommodate companies that wanted offices near their owners, employees, and customers. For over 50 years, this cycle repeated itself throughout the country and suburban office markets boomed.
This changed in the first decade of the new millennium. The millennials, raised on digital social connectivity, wanted social connection in real life and a lifestyle incorporating working, living, and playing, in the same proximity. They moved to cities, both large and small, that could accommodate their lifestyle: New York City, Los Angeles, San Francisco, Chicago, Boston, Denver, Salt Lake City, Nashville, Austin, Portland, and Phoenix. Technology and other industries followed, driven by their need for millennial talent. As a result, the millennial population and businesses grew exponentially in the cities while declining dramatically in the suburbs.
The question is how long will this new paradigm last? It has been predicted that once the millennials reach forty years old they will start families, want houses, and move to the suburbs. Since the millennials are defined as the demographic born between 1980 and 2000, the first 40-year-old millennials won’t reach us until 2020. All we can do is wait; time will tell.