Start-ups and rapidly growing, early stage companies, especially those in exploding new industries like robotics and artificial intelligence, are typically attracted to space that’s centrally located within a city or is near its universities. Nevertheless, city center space is finite and often expensive. While this poses a challenge for young companies that need space that fits both their needs and budget, it presents an opportunity for owners and developers with properties outside central business districts (CBDs). But in order to encourage these companies to move to urban fringe communities and beyond, property owners and developers need to know what their potential tenants might see as positive features and what they might see as pitfalls.
As much as budget factors into location decisions, companies choose locations based on how well the property and surrounding community fits their brand image and appeals to the talent they are trying to attract. Employees and potential employees not only want creative, amenities-rich workplace environments, they want to work in a neighborhood that makes them feel welcome and can provide them with a sense of belonging. They care deeply about the surrounding community atmosphere and the type of identity it conveys. If they cannot easily or comfortably go out for a coffee break, take a client to lunch or get drinks with co-workers and friends after work, the property will raise immediate red flags. Outside CBDs, it’s harder to recreate the energy and vitality that naturally occurs within a vibrant city center, but it’s not impossible.
Economically depressed, urban fringe neighborhoods—where industry pillars have collapsed and turned to blight—are particularly challenging to develop and market, but they are also full of potential, especially if the community has made a commitment to revitalization. Property owners and developers who attract new industry to the neighborhood can become catalysts for renewal. While the properties and their proximity to blight may initially conjure negative images, if they are unique, interesting spaces, relatively inexpensive, and potential tenants are confident in local revitalization efforts, companies will be more likely to take a chance.
After all, companies that invest in a community’s turnaround will mutually benefit from its success. Take Lawrenceville for example, a neighborhood in Pittsburgh that was “once a blue-collar neighborhood more down-and-out than up-and-coming,” according to Pittsburgh Magazine, but is now one of the city’s hottest neighborhoods. Its economic upturn was prompted by the redevelopment of old, obsolete industrial sites, which provided homes for a new industry and eventually sparked its renewal.
As for more suburban communities—neighborhoods that are a little further out from the CBD and urban fringe—blight is usually less of an issue. Instead, property owners and developers need to create community connected properties that aren’t sterile in appearance and don’t feel like a product of urban sprawl. Building a high level of amenities into the property will make it more unique and more appealing to future tenants and their workforce.
Having property that is near public gathering places like parks, sports fields/leagues and bars is a particularly attractive quality for potential tenants, especially since the number one amenity for young talent is interaction with other young talent. Other high-level on-site amenities found on tenant wish lists may include:
- Green spaces and picnic areas
- Rooftop patios
- Skylights to let in natural light
- Showers and other fitness amenities
- Bicycle- and pedestrian-friendly roads and paths
Even if most tenant employees don’t bike or walk to work, or only do so during good weather, they still want to be able to stretch their legs during the lunch hour or squeeze in a bit of exercise on their way home from work.
Ease of transportation is another factor potential tenants will weigh when making location decisions. Their employees want to get to work quickly and commute less, so companies will look for properties located in spots they can get to by public transportation or car without heavy congestion. Being aware of traffic patterns and mass transit routes is crucial and accessibility to the latter should not be taken for granted. In areas situated outside the CBD and urban fringe, buses and light rails are not always convenient to use or readily available.
That may mean the property can’t be too far from residential areas, so tenants’ employees have the option to live near where they work. But to retain good employees and tenants over many years, the nearby neighborhoods need to offer diverse housing options and quality of life. Apartments and condos may work for young, single employees, but their wants and needs will change as they mature and start having families.
Interests and concerns regarding access to restaurants, places of entertainment, community events and public amenities—like parks, pools, libraries and bike trails—will expand to: are there affordable houses in the area? Do I feel comfortable sending my children to the public schools?
Finally, companies looking to lease, buy or build property want to work with well-regarded developers who can help them forge strong relationships with community members and local government. Getting off on the right foot and being welcomed into a community is an important part of ensuring companies stay long-term. They need advocates who will position them as good corporate neighbors and will assure residents that they will positively contribute to the local economy. And if land use or zoning issues arise, having knowledgeable and well-respected partners will make the approval process run more smoothly.
At the end of the day, a property’s ability to attract talent is the most important factor companies need to consider when making location decisions. They want to be able to offer their employees a rich sense of community, easy access to amenities both inside and outside of work and, ideally, a place to call home. Both property owners and developers need be sensitive to that when marketing to young companies and encouraging the expansion of new industry from traditional central business districts.
This article provided by NewsEdge.