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Trend: Corporate Campuses Moving Downtown
"Office Glut" in the Suburbs


Conagra Foods has announced it is moving its corporate headquarters from Heartland of America Park in Omaha to the Merchandise Mart in downtown Chicago this summer. The building closest to the lake is the Omaha headquarters. Conagra will be giving up views of the lake and nearby Missouri River in favor of the Chicago River, but more importantly, The World Herald reports that half the Omaha Conagra office jobs will be lost in the move. Conagra's Naperville, Illinois office will join the Chicago team. Photo: Creative Commons Attribution 2.0 Generic license.

Large companies moving their corporate campuses to the roomy suburbs used to be the trend, but there's a growing new trend afoot: moving back downtown.

The Wall Street Journal reports an "office glut" in the suburbs, as large multinational companies like General Electric, Wehyerhaeuser and Conagra Foods are moving from spacious headquarters on the outskirts of cities to downtowns. General Electric plans to move from Fairfield, Conn., to Boston; Wehyerhaeuser is leaving the Seattle suburbs for headquarters in the south downtown area; and Conagra has announced a move from its lakeside headquarters in Heartland of America Park in Omaha to downtown Chicago.

What's going on? Why are major corporations headed back to downtown? Major considerations are for personnel recruitment, and to retain workforces. The trend is moving away from the "isolation" in the suburbs to the energy and vitality of downtowns.

This trend is creating two problems for the municipalities abandoned by the big companies: What to do with these large corporate campuses, and how to make up the huge loss of tax revenue provided by large office parks. Some communities are looking to convert these facilities into apartments and retail space.

While Cushman & Wakefield report demand for commercial office space in 2015 was at the highest level since 2006, large office buildings outside of downtown areas abandoned by large corporations are not easy to fill. The epicenter of this reality has been northern New Jersey, but Newmark Grubb Knight Frank notes that the 2015 fourth quarter office market statistics saw a flight from suburban offices to more urban areas in Dallas and Los Angeles.

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June 18, 2019, 6:47 pm PDT

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