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Writer's pictureTom Reilly

The Suburban Office Could Blur the Lines of Residential, Commercial



May 5, 2021


Remote work is likely going to continue in some form, but that doesn’t mean workers never want to head into an office again. Investors are betting on a post-pandemic surge in interest in workspaces located in suburban neighborhoods. To get ahead of what they foresee as a trend, they’re eyeing suburban residences and empty retail, with the thought of turning them into smaller office spaces that can be rented out.


Some startups and property management owners are offering flexible office spaces in the suburbs for remote workers who need a break from working from home. They’re touting furnished office space that can be booked by the day or month. For example, one such startup called Daybase is turning retail spaces into furnished offices that can be rented out in suburban locations. The company doesn’t want to replace corporate headquarters but rather to create a network of smaller offices.


“A proliferation of new suburban office spaces could help fill empty retail space,” The Wall Street Journal reports. “They could also further blur the distinction between residential and commercial neighborhoods and help remake metropolitan areas.”


Many cities were built around central business districts. Urban planners say cities could undergo a transformation as an increased number of smaller offices open in the suburbs and lower the commute times for workers.


However, analysts in the office sector predict that many companies won’t shy completely away from brick-and-mortar even if remote work grows more commonplace permanently. The physical presence of an office, big or small, still helps to maintain visibility in the community and serves a place for staff members to meet and collaborate with each other or with clients.


Demand for flexible office space nationwide grew by 21% in the second half of 2020, according to a report by The Instant Group. The transactions tend to be mostly for smaller buildings with fewer spaces.


Some companies believe it’s because workers may still want to work from home but need a break from their own home. As such, AvalonBay Communities Inc., which owns more than 85,000 rental apartments nationwide, is launching a private workspace option called Second Space that its residents can book by the month.


“It would be kind of an add-on, just like you might pay extra for a parking space or storage space,” Matt Birenbaum, the company’s chief investment officer, told The Wall Street Journal.


Source: “Suburban Homes and Retail Are the Budding New Office Hotspot,” The Wall Street Journal (May 4, 2021) [Log-in required.]

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