Skip to Content
Streetsblog USA home
Streetsblog USA home
Log In
Development

Real Estate Giant: Suburban Office Parks Increasingly Obsolete

2:03 PM EST on December 10, 2015

What tenants want in an office building is changing, and the old model of the isolated suburban office park is going the way of the fax machine. That's according to a new report from Newmark, Grubb, Knight and Frank [PDF], one of the largest commercial real estate firms in the world.

Suburban office parks are losing their luster, industry analysts say. Photo: Wikipedia
Suburban office parks are losing their luster, industry analysts say. Photo: Wikipedia
Suburban office parks are losing their luster, industry analysts say. Photo: Wikipedia

The old-school office park does "not offer the experience most of today's tenants are seeking," according to NGKF. As a result, the suburban office market is confronting "obsolescence" on a "massive scale." More than 1,150 U.S. office properties -- or 95 million square feet -- may no longer pencil out, the authors estimate, though a number of those can be salvaged with some changes.

"Walkability and activated environments are at the top of many tenants' list of must haves," the report states. Office parks in isolated pockets without a mix of uses around them must have "in-building amenities" -- including a conference center, a fitness center, and food service -- to remain competitive, according to NGKF: "If tenants are not going to be able to walk to nearby retail or a nearby office property to get lunch, they had better be able to get it at their own building."

The study took a close look at suburban office submarkets in and around Denver, Washington, San Francisco, Chicago, and New York. In the "southeast suburban" Denver office district, for example, office buildings within a quarter-mile of the new light rail line had a 1.7 percent vacancy rate. For those outside a quarter-mile, vacancy rates were nine percentage points higher.

NGKF's findings don't mean that office tenant preferences are in perfect alignment with walkability, however.

Parking was also important to the marketability of buildings in suburban Denver. The report notes that a lot of older management personnel prefer to drive, while younger workers want transit access. So buildings that offered both were in the highest demand.

Stay in touch

Sign up for our free newsletter

More from Streetsblog USA

Why We Care About Some Transportation Tragedies More Than Others

Why do we respond to major transportation disasters with so much urgency — and why don't we count our collective car crash epidemic among them?

March 28, 2024

The Toll of History: MTA Board Approves $15 Congestion Pricing Fee

New York City's first-in-the-nation congestion pricing tolls are one historic step closer to reality after Wednesday's 11-1 MTA board vote. Next step: all those pesky lawsuits.

March 28, 2024

Take Thursday’s Headlines Home, Country Roads

Heat Map reports on why rural Americans are resisting electric vehicles, and why it might not matter much for the climate.

March 28, 2024

Guest Commentary: Traffic Engineers Must Put Safety Over Driver Throughput

No other field would tolerate this level of death and destruction. The tragedy of West Portal is more evidence that the traffic engineering profession is fundamentally broken.

March 27, 2024

Wednesday’s Headlines Missed Connection

The Biden administration is spending billions to reconnect neighborhoods torn apart by urban freeways. But the projects seem to simply paper over the problem, Governing reports.

March 27, 2024
See all posts