Demand for offices has dwindled and companies are readily embracing flexible office solutions, such as hub-and-spoke models or hybrid arrangements.
While the consensus has largely been that companies will need to expand their reach to suburban areas of major markets to accommodate the employees that live or could move there, the future of a distributed workforce is more nuanced than that.
According to a new report from JLL, the corporate urban-to-suburban move will be limited this year. In fact, the big winners over the next few years will be the Sun Belt and Mountain West submarkets.
The markets that suffered the most occupancy losses last year were New York, San Francisco and Seattle. However, Sun Belt markets like Atlanta, Raleigh-Durham and Phoenix remained relatively stable.
Areas with low taxes and high growth saw a boost last year, with the largest migrations being from San Francisco to Austin, New York to Austin, San Francisco to Seattle, New York to Denver, Chicago to Nashville and New York to Miami.
Still, gateway cities like Chicago, New York and San Francisco will still rebound as vaccines become more widely distributed and the retail and entertainment industries begin to reopen. It’s just a matter of when this will happen.