SUBURBAN OFFICE MARKETIn general, suburban office markets attract back-office operations or tenants that do not need the prestige, high visibility and regional accessibility offered by central locations. The regional accessibility more conveniently available at central locations is required by firms serving the whole metropolitan area. Many suburban office tenants are serving local markets and proximity to this local clientele is more important than the regional accessibility offered by central locations. According to data presented by Hughes Miller and Lang (1992), in 1981, about half (51.4%) of the US total office space stock was located in Central Business Districts but by 1985 this percentage dropped to 43.1% and by 1990 to 40.6%. According to data presented by CBRE Econometric Advisors the share of suburban office space to total US office space stock had increased above 70% by 2009. Although rents and vacancies in suburban office markets differ more or less systematically from central-city or downtown office markets there are clear links and interaction between the two submarkets. For example, very high rents in central locations often induce tenants to seek the lower rates offered in suburban locations, thereby limiting rent growth in the former and reinforcing demand in the latter. |
