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Recent research from The Instant Group and HICKEY found that growth in secondary cities and suburbs has outstripped demand in central business districts. 

by Allwork.Space - Press
March 11, 2021
in Press
Reading Time: 4 mins read
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Recent research from The Instant Group and HICKEY found that growth in secondary cities and suburbs has outstripped demand in central business districts.  

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  • Recent research from The Instant Group and HICKEY found that growth in secondary cities and suburbs has outstripped demand in central business districts.  
  • Businesses can save more than 23 percent on office leases with a dispersed portfolio model.  
  • This would mark a huge shift for people working in New York City, who have the longest average commute time in the U.S. 

NEW YORK – Growth in secondary cities and suburbs has outstripped demand in central business districts as 57 percent of employees want an office closer to home, according to a new research report from The Instant Group and HICKEY, “The Rise of Suburbia: Can a hub and spoke model really work?” released today. 

This desire is a stark contrast to existing supply in New York City, where more than 81 percent of the office and more than 85 percent of all New York City flexible workspace supply is in Manhattan. 

With a dispersed portfolio model, Instant and HICKEY found that businesses can save more than 23 percent on office leases, while employees would save on average 1.5 hours a day in commuting time and in New York, $7,000 a year in mileage costs and $1,100 a year in public transportation costs. 

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This would mark a huge shift for people working in New York City, who have the longest average commute time in the U.S., as 59 percent of New Yorkers live in the suburbs. 

“When we think about this, if just five percent of New York’s 1.5 million office workers want to relocate to spoke locations in the suburbs, existing and planned supply would not be able to cope,” said Joe Brady, CEO Americas, The Instant Group. “Change is needed. Losing talent is the number one risk for CEOs, with turnover costing tens of thousands of dollars. Based on how and where employees want to work, we believe that corporate headquarters will shrink by up to 40 percent, on average, in the coming years, as a result of this marked pandemic shift.” 

For the greater New York market, Instant and HICKEY charted real estate portfolios of the future. The most likely regional locations in a dispersed portfolio for businesses considering a hub-and-spoke model, particularly in pharmaceutical and financial services, are Huntington, New York; Nyack, New York; New Brunswick, New Jersey; and Trenton, New Jersey. 

Secondary towns in the U.S. have seen reasonable levels of investment, with modern office options; however, most locations would currently be hard-pressed to offer an employer more than 30 desks let alone the 60 or more that are likely needed. 

There will also be opportunities for spoke locations in second-home locations as people in executive and senior roles are increasingly spending time in these vacation and coastal areas to the north and east of New York. 

Guy Douetil from HICKEY said, “Employees are now more empowered than ever to choose where, when and for whom they work. Companies need to understand that in selecting a location the emphasis has changed from ‘where do people go to the office to work’ to ‘where do people live’?’ It is also worth remembering that no single city is the same, it is vital to understand how commuting patterns vary between locations in terms of mode, ease and time of commute.”     

The report also analyzes international markets including London and Manila. 

About The Instant Group 

Founded in 1999, The Instant Group is a workspace innovation company that rethinks workspace on behalf of its clients injecting flexibility, reducing cost and driving enterprise performance. Instant places almost 8,000 companies a year in flexible workspace such as serviced, coworking or managed offices including Amex, Barclays, Prudential, Booking.com, GSK and Shell making it the market leader in flexible workspace. Its listings’ platform www.instantoffices.com  hosts more than 15,000 flexible workspace centers across the world and is the only site of its kind to represent the global market, providing a service to FTSE 100, Fortune 500 and SME clients. With offices across the world, The Instant Group employs 250 experts and has clients in more than 150 countries. Instant is ranked #33 in the 2020 Sunday Times HSBC International Track 200. www.theinstantgroup.com www.incendiumconsulting.com 

About HICKEY 

HICKEY is a global leader in site location strategy, economic incentive advisory, and workforce solutions with active projects in the Americas, Asia, Europe, Australia, and Africa. Utilizing state-of-the-art tools and techniques, HICKEY assists businesses in determining the most optimal location to expand, relocate or consolidate anywhere in the world. By having a presence in key markets throughout the world, HICKEY ensures our services are always aligned with each unique local environment and provides our clients with an unparalleled level of support. HICKEY has offices strategically located around the globe, including New York City, Chicago, London, Amsterdam, San Francisco, Hong Kong, Shanghai, Tokyo, Singapore, Sydney, Bangalore, São Paulo, and Mexico City. www.hickeyandassociates.com 

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