Will office tenants prefer the suburbs in the wake of COVID-19?
The very shape of urban high-rise office buildings could fall out of favor, as low-rise suburban office campuses with large parking lots begin to look safer amid a highly contagious disease.
“In a world focused on social distancing, it is clear that for most companies, desirability will shift in favor of lower-density campuses with green space, lower-rise buildings with both stairwell and elevator access to tenant floors, and transportation access focused on individual vehicles rather than mass transit,” says David Rubenstein, president and CEO of Rubenstein Partners.
Rubenstein notes a pre-existing development in the office sector over the past few years is the most competitively advantaged assets within suburban markets have outperformed their urban counterparts, reflecting a trend of millennial migration to the suburbs. “We expect the coronavirus to serve as a catalyst to further accelerate this shift, as millennials take advantage of better school systems, mo