A growing concentration of households in suburban areas throughout the country is sparking renewed interest in office properties located outside urban centers, according to a recent report from Marcus & Millichap. Millennials’ general preference to work in amenity-rich office buildings with walkable retail and dining options heightened demand for urban office space for much of the post-recession era, notes the report. Overall vacancy for urban office properties declined by 250 basis points during this period and clocked in around 14 percent as of the first quarter of 2017. This activity spurred a 7 percent increase in asking rents across America’s urban office markets, but demand for these properties is beginning to slow. The suburbs, where rents for stabilized properties land for new properties are cheaper, are currently poised to benefit from rising rents in urban sectors, according to the report. Compounding the opportunities for suburban office properties are the general demographics of those markets. According to the report, as of 2015, 64 percent of America’s households resided in the suburbs. That figure is projected to rise as high as 75 percent by 2025. Particularly in smaller areas with tighter labor markets, this proportion is an important consideration. In addition, the …
