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A Deep Dive into Suburban Retrofits
"Q2: You offer up a pithy summary of the US market, noting that of the 1,100 shopping malls, one third are dead or dying. The 50,000 strip malls have a 11% vacancy rate. Within the 350,000 big box stores, 300 million square feet are vacant. However, you point out these dynamics have been around awhile, with the newest marker being the suburban office vacancy rates of 16-24%. What has changed to make these suburban offices less attractive?"
"There are several converging factors here. The one most frequently cited by CEOs is the need to relocate to the cities that are attracting the educated 25-34 year-olds that they most want to hire and who, for the most part, find the idea of working in a Dilbert-like suburban cubicle un-creative and toxic. Additional factors include the fact that computers have automated many of the clerical jobs that used to be done in the suburban back-offices at the same time that space/employee standards have significantly reduced. The wave of ’80′s office parks and corporate campuses are aging and increasingly out of date, while the cities have become immensely more livable than they were in the '70s. So, we're seeing the tide reverse itself as a wave of corporate relocate out of suburbs and back into cities and newly named 'innovation districts.'"