The Institutional Real Estate Inc Sponsorship brochure, Connected-Investor Focused, We connect people, data and insights, sponsorship, events, IREI Products
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NAREIM DIALOGUES FALL 2016 21 Recent Smart Growth America research revealed six common factors explaining why companies choose to locate downtown: 1. To attract and retain talented workers 2. To build brand identity and company culture 3. To support creative collaboration 4. To be closer to customers and business partners 5. To centralize operations 6. To support triple bottom line business outcomes There are literally hundreds of downtown locations to choose from, and what Smart Growth America has also uncovered is what companies are looking for when choosing a new location: • Walkable neighborhoods • Access to several transportation options • Renovated office/warehouse space • Unique building and city architecture • Welcoming city with features such as outreach, permit assistance or financial assistance • Safe and clean locations As with Toyota, it's important to note that this trend toward locating in more dynamic places is not just taking place in downtowns. In fact, some of the most attractive locations are the ones that replicate the benefits downtown places offer. These mixed-use locations offer urban-like qualities in the middle of the suburbs and can be hugely successful. It's the best of both worlds — the benefits of urban-like settings, but also with more housing options, better schools and for some, easier commutes. And for these urban-like, suburban places, success begets more success as added attractiveness, people and development (read "density") improve the comparative quality to the sometimes more authentic character of "true" downtowns. Whether it's a high-energy downtown or leafy suburb, many markets are connected to one another in some fashion and are sensitive to fluctuations occurring in neighboring markets. This means that while the actions of McDonald's, General Electric, Toyota and others alike are spurring activity in downtowns and the best mixed- use locations, surrounding areas and secondary markets are also impacted as many smaller and medium-sized companies are following suit in an effort to stay proximate to their larger business partners. Another key factor to consider is how aging of the millennial generation will impact these migration trends. Will millennials, like generations before them, be drawn to the space more suburban locations offer as they grow older, marry and have children? Will companies follow the talent back to the suburbs as they have in prior times or perhaps double down on split locations and better use of technology to pioneer digital workplace collaboration? Irrespective of where you fall in your opinion of the future, it's clear to see that all of these factors link back to a focus on talent like never before. It's this focus on gaining a competitive edge in the talent arena and use of this resource that will change the playing field for many years to come as our ability to innovate has become a central theme for the U.S. economy. Staying ahead of these trends and how they impact the real estate market is especially critical in today's slow-growth economy where "shifting demand" can be as impactful as "new" demand. It's clear to see that these relocation shifts have a domino effect and that understanding this trend is really about understanding how the focus of business has changed and how this might provide valuable insight into what comes next. Ken Robertson is the Central Regional President for KBS overseeing over 12 million square feet of office, industrial and retail space. www.kbs.com www.linkedin.com/in/kennethrobertsson The talent revolution is in full swing, and it's where to look for what comes next.