Middle Market Digest-The Midwest

CHICAGO—The migration of firms from suburban office parks into downtown buildings is a well-advanced process in many core metro areas, including Chicago. But that trend is now gathering steam in many secondary markets where the suburbs have until recently dominated the office market, including Detroit, Indianapolis and Kansas City. And the trend seems driven by the same factors. Millennials all over the nation have rejected suburban lifestyles in favor of walkable neighborhoods in and around urban cores. And that, in turn, has tech-oriented and creative firms flocking to downtown spaces, especially older class B buildings that provide greater aesthetic appeal than many glass towers or suburban campuses. The numbers cited just below, and in an accompanying story on the Indianapolis market, tell the story. But it is highly unlikely that these revived downtowns will begin to dominate their respective regions. As has been seen in the Chicago metro area, where some firms have committed extraordinary resources to new suburban office developments, the suburbs in each area retain a lot of appeal. Tech firms may be headed to downtown Indianapolis, for example, but healthcare and financial services seem happy to remain in the outlying submarkets. Therefore, in the future, most US metros should see a greater balance in demand.

BY THE NUMBERS