Two or three decades ago, the standard criteria for choosing an office location was often, “Where does the boss live?” says land use strategist Christopher Leinberger. And the boss inevitably lived in a car-oriented suburb.
But the tide’s been shifting for a while now, with more American companies ditching suburban office parks for downtown locations. In 2013, Zappo’s chose to head to the center of Las Vegas, setting up shop in the former City Hall building. Biogen, a global biotech firm, tried out the Boston suburbs for four years before moving back to the heart of Cambridge in 2014. In downtown Raleigh, software firm Citrix recently took over an abandoned warehouse just three blocks from the Amtrak station.
Smaller companies are doing it, too, in smaller urban areas. In Conway, Arkansas, this year, Big Cloud Analytics opened a two-person office, pinning their company’s expected growth to the downtown’s projected resurgence.
A new report from Smart Growth America, “Core Values: Why American Companies Are Moving Downtown” [PDF], takes stock of this trend over the past five years and seeks to understand what motivates these companies to choose central locations.
George Washington University’s Center for Real Estate and Urban Analysis and the real estate firm Cushman & Wakefield surveyed 500 companies that made the move downtown and interviewed executives at 45 of them. It was like a “giant focus group looking at why people are doing this,” said Leinberger, who helped guide the report. An interactive map shows where these companies are relocating.
The survey identified a few key factors underlying the move downtown. The biggest one is an increased ability to recruit and retain employees — companies are finding they get a competitive edge with an office in an accessible, walkable location.