Suburban Offices Are Keeping Operators Afloat

IWG is noting an uptick in demand for suburban office spaces, as opposed to their locations in large cities.

This trend is becoming prevalent across several real estate companies, particularly those with locations in New York and London.

According to IWG, deals for its downtown New York offices have fallen by 30% since the beginning of the pandemic, while activity in southern Connecticut has grown by over 40%.

In London, UK-based Crest Nicholson Holdings Plc said its drop in profits were not nearly as bad as predicted due to growth in office spaces in southern England.

Since March, millions of people were forced to work from home as the threat of contracting COVID-19 remained large. With time, companies have navigated how to continue in-person operations, without putting workers at risk. 

However, workers are still weary about taking public transit in large cities. This has led organizations to adopt offices in the suburbs to disperse their workforce, and accommodate employees who need a workspace outside of their homes.

“This shows the current trend of buyers wanting more space — inside and outside of the house,” said Iwona Hovenko, London-based analyst at Bloomberg Intelligence. “But it will be interesting if the trend lasts once the pandemic passes. I am a strong believer in London long-term.”