Suburban office challenges CBD office
Demographics favor suburban office demand, according to a report by Marcus & Millichap, in a shift from recent years.
Nearly two-thirds of households already reside in the suburbs, fostering demand for office space in suburban markets. Shorter commute times entice many workers to seek employment in suburban office locations.
Suburban companies are seeking spaces in prime locations to cater to the lifestyle that many young professionals enjoyed in CBD areas. As a result, many suburbs are transforming into their own urban environments with walkability, entertainment, and retail and dining options.
Suburban office construction has heightened during the past two years but remains far below the completions recorded during the previous cyclical peak. Minimal completions and steady absorption signal the potential for further vacancy improvement.
Healthy demand also has spurred rent growth with the average asking rent up 7 percent from the 2008 peak. Asking r