The suburban corporate headquarters is losing its charm

In April, Quicken Loans bought Chase Tower, a 505,000 square feet, 14-story high rise office building occupying a full city block in downtown Detroit's central business district.
The suburban campus headquarters, once the pinnacle of corporate America, is on the decline. Two recent pieces from the Wall Street Journal and Fortune magazine explain that many companies are choosing to leave their suburban headquarters in favor of walkable downtowns with smart growth features.

“The youth of America, when they graduate, they’re looking to go to an urban environment,” Quicken CEO Bill Emerson explained to Fortune. Explaining that top recruits wanted to be in a place where they could live, work and play, Emerson added, “An asphalt parking lot is not necessarily the best way to do that.”

Features like mass transit, shorter commutes, the option of walking to work and access to restaurants and shops – all key principles of smart growth development – are forming a new model of what America’s most desirable workers want. Rather than trying to lure these workers out to the suburbs, many companies – including corporations like United Airlines,, Credit Suisse AG, Panasonic – are relocating to where young, talented professionals want to live. According to Fortune:

In general, suburban or rural locations are cheaper per square foot, have lower taxes, ample parking, and don’t require higher salaries for employees to feel reasonably compensated. But for companies looking to recruit younger people, all those factors have to be weighed against the reality that there is nothing hip about the ‘burbs.

The Wall Street Journal reinforces this trend by examining its flip side: suburban commercial real estate values are declining.

The suburban office market, a sector dominated by corporate office parks near highways, is being left in the dust by the recovery of major U.S. downtowns. Vacancy rates have begun to fall in cities while staying flat in suburbs, in part due to the declines of suburban-heavy sectors such as the housing industry. As a result, suburban office property values have been left behind, while investors have been flocking to bid on office buildings in cities they consider to be long-term safe bets.

Walkable neighborhoods with homes close to jobs, shops and schools are a key smart growth strategies, and are in increasingly high demand across the country. It’s not just individuals or families who want smart growth, either; as these articles show, even major corporations want to be in great neighborhoods.

Companies head back downtown [Fortune, July 14, 2011]

Pain Prolonged in Suburban Office Market [Wall Street Journal, July 13, 2011]