Corporations are killing suburban office parks, so people have started living in them
As more corporations flock to cities, they are vacating these office parks, many of which were built in the 1980s.
But some of these parks are not staying empty. An increasing number of developers are converting them into housing, according to a recent Washington Post report.
In suburban New Jersey, developers are turning the former 2 million-square-foot Nokia Bell Labs headquarters into new office space, stores, and restaurants. Next door, the homebuilder Toll Brothers is constructing 40 single-family homes and 185 townhouses.
In 2016, a suburban office park in Bethesda, Maryland (a Washington, DC suburb) added a townhouse development, called Montgomery Row, on a former parking lot. And in Tyson, Virginia, another DC suburb, 17 office buildings are being redeveloped into housing, outdoor space, and retail. In 2013, a 4,000-acre business park in northeast Houston also built a development that incorporated mixed-use housing.
Starting as early as the 1950s, many developers had envisioned suburban office parks as roomier spaces for companies that had fled dense downtowns.
But now, many of America's largest corporations are moving back to cities, largely as a way to attract younger employees. Beginning in 2015, McDonald's, Kraft Heinz, and ConAgra Foods all ditched the Chicago suburbs for office spaces downtown. In August, General Electric announced it was leaving Fairfield, Connecticut, for Boston.
"Companies want to move to areas where millennials are located," Robert Bach, director of research at the real-estate advisory firm Newmark Grubb Knight Frank (NGKF), told Business Insider earlier this year.
A 2016 report by NGKF looked at office parks in five suburbs, and found that between 14% and 22% were "in some stage of obsolescence" (i.e. high vacancy rates, too much or not enough parking, the space needs substantial renovations). That suggests that up to 1 billion square feet of office space - or 7.5% of the country's entire office inventory - is becoming obsolete for the people who work there.
Google and Facebook's sprawling offices offer a hint of what the future could look like. The two tech companies are spending millions to build housing for their employees. At their corporate campuses, there will soon be new developments that will include stores, eateries, transit stops, and thousands of units of housing. Facebook, for example, plans to put 1,500 new housing units, a grocery store, pharmacy, and shopping center in the 56-acre Menlo Science & Technology Park it bought in 2015. The company calls the development a "mixed-use village."
These developments paint a promising picture of what office parks could become: Residential areas where people are not only able to work, but live, eat, and access transit, too.