Downtowns Drawing Tenants Over Suburbs: Secular Shift or Aberration?

The December 13, 2010 Wall Street Journal has an interesting article entitled “Downtowns Get a Fresh Lease: Suburbs Lose Office Workers to Business Districts, Reversing a Post-War Trend” by Anton Troianovski.  The article summarizes a trend that we have seen across the country in office markets over the past few years where downtown markets have drawn more tenants than the suburban markets.  This is largely due to a difference in tenant demographics between suburban and downtown markets in today’s economy.   Specifically, many suburban office tenants are directly or indirectly involved with the housing industry where we have seen the largest job losses.  Whereas downtown tenants are government entities, banks, financial services companies, law firms and professional service companies.  This trend is also being driven by the redevelopment of many downtown areas around the country.

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