From the WSJ:
Suburban landlords trying to compete with sleek urban office settings are finding new ways to step up their game.
Property owners in New York’s suburbs are investing heavily to remake bucolic corporate campuses built during the 1980s and 1990s, adding glass facades for natural light-filled offices and retail space for restaurants, cafes and, in at least one case, a supermarket with specialty services.
They also are rolling out features such as modern fitness centers, bike-share programs, walking trails and spacious lobbies as spaces to socialize.
“It’s all about landlords trying to attract tenants, and tenants trying to attract millennial recruitment,” said Daniel Loughlin, broker lead of real-estate services firm JLL’s New Jersey office.
The suburban office market has lagged behind the New York City office market during this expansion, as preferences shifted to urban settings with restaurants, shops, nightlife and mass transportation, brokers and executives said.
But the suburbs continue to have a larger share of the region’s jobs than the city, noted Kenneth McCarthy, principal economist for real-estate services firm Cushman & Wakefield. As of December, 54.6% of the jobs in the New York metropolitan area were in the suburbs, according to his analysis.
As companies consolidate offices and look to take less space, landlords and investors are betting that overhauled, amenity-laden suburban office properties will attract large tenants already in the suburbs.
Simply being near a hip urban setting isn’t enough, said Michael J. DeMarco, president of real estate investment trust Mack-Cali Realty Corp. The Mack-Cali Business Center in Parsippany, N.J., has two hotels and a restaurant and is near downtown Morristown. Wegmans Food Markets Inc., a supermarket chain known for specialty services, is set to open a location on the edge of the office park this year.
Mack-Cali, which owns about 1.9 million square feet of space in the park, is planning to bring in a 70,000-square-foot fitness club, another hotel and four or five restaurants nearby.
“Food has become an incredibly big thing for millennials,” Mr. DeMarco said. “When you were younger, you’d go out and get a sandwich. Now you get sushi.”