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Downtowns Drawing Millennial Workers — and the Companies That Need to Attract Them

Companies are choosing walkable downtown locations to help them better compete for talent and resources while supporting triple-bottom line business outcomes.

Q3 2015
According to Julia Georgules, Vice President and Associate Director of Office Research at JLL, approximately 25 percent of the overall workforce is under 30 years old (the millennials), and this is projected to rise to 50 percent by 2020. (See “Urban Vs. Suburban: Which Location Will Allow Your Company to Grow?”) These millennials often prefer to live and work in neighborhoods offering restaurants, cultural venues, shopping, and entertainment and nightlife as well as easy access by public transportation.

With this in mind, Smart Growth America — a coalition that advocates for “smart growth” solutions across the country — and commercial real estate services firm Cushman & Wakefield recently partnered for a large-scale study on companies moving to and investing in walkable downtowns. Their report — Core Values: Why American Companies Are Moving Downtown — released in mid-June, examines the characteristics, motives, and preferences of nearly 500 companies that have made such a move in the past five years.

“The findings reveal an enormous diversity of businesses choosing to locate downtown,” said Cushman & Wakefield’s Paula Munger, director of business line research. “And the migration is happening across the country, in big cities and small CBDs, and in secondary markets within larger metropolitan areas from coast to coast.”

The study, also supported by the Center for Real Estate and Urban Analysis at the George Washington University School of Business, asks these businesses what motivated them to locate downtown and what they looked for in their decision-making. The interviews revealed six common themes explaining why companies chose to locate downtown:
  • Attracting and retaining talented workers
  • Building brand identity and company culture
  • Supporting creative collaboration
  • Gaining proximity to customers and business partners
  • Centralizing operations
  • Supporting triple-bottom line business outcomes
The interviewees also said their companies chose vibrant, walkable neighborhoods where people want to live as well as work. Other location factors included a variety of transportation options, the right office space, a warm welcome from the city, and a clean and safe environment.

"These companies chose a walkable downtown location to help them better compete for talent and resources,” said Geoff Anderson, president and CEO of Smart Growth America. “That tells us two things. First, that creating these kinds of places is a crucial economic development strategy for cities. And second, that companies which haven’t considered a walkable location may be at risk of falling behind.”

“This study sheds light on strategies that can help companies and the cities they work in thrive for decades to come,” Munger said. Further, according to Cushman & Wakefield’s 2014 report on urban development, city governments, developers, and businesses that partner to enhance the overall experience of urban life; keep pace with population surges; reduce commute times; and attract millennial talent, will strengthen their positions as world-class cities.
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