While most cities were designed around central business districts, there are now more suburban office spaces being offered by startups and property management companies. Many of these companies offer furnished office space that can be booked by the day or month. Some companies are even turning retail spaces into workspaces. Some urban planners argue that more suburban offices will decrease commute times.
Workspace
The move comes as more Fortune 1000 companies have begun to seek new space outside of the city center. In a recent CBRE report, suburban office take-up accelerated despite the continued slump in downtown office occupancy. This has led to several companies, including Workspace, rethinking their presence in urban markets and betting that suburbia will be the next hot spot.
GIC
The demand for small office space in suburban locations is high and investors are betting on this trend. Companies such as GIC Pte. Ltd. are investing in 53 suburban office buildings. Workspace Property Trust is another example. It has a portfolio of 18 million square feet.
Daybase
Daybase is a new co-working space startup that is targeting the suburbs and dense urban areas. Founded by two former WeWork executives, the company is leasing vacancies in retail centers and office buildings to offer coworking options. For a membership fee of $50 per month, members have access to a lounge and a desk. They can also pay $10 per hour to use a desk.
Investors
A new wave of investors is betting on the suburbs to grow their multifamily portfolios. According to JLL, private equity giant Barry Sternlicht has bought a portfolio of multifamily properties in the suburbs from Equity Residential for $5.4 billion. While Wall Street scoffed at the deal when it was first announced, recent research shows that suburban rents are rising as people seek relief from the high rents of core urban high-rises.
Community-oriented retail
Community-oriented retail is on the rise in today’s suburbs. With same-day delivery and drones, shopping centers will be able to serve most of the U.S. with ease. Instead of just selling goods, community-oriented retail will be able to offer experiences and opportunities. This means that restaurants, theaters, and grocery stores will likely become a major part of the retail mix.