Companies Say Goodbye to the 'Burbs

[mota bhai 2,675]

Young Talent Wants to Live in Chicago, Not Libertyville; Dilemma for Older Workers

When Motorola Mobility lined up a Silicon Valley candidate a few months ago for a VP-level role, the phone maker was hopeful he'd accept. After all, the company offered the chance to develop products at a subsidiary of Google Inc.

The engineer declined. His reason: the prospect of relocating to Libertyville, Ill., about 35 miles from downtown Chicago, said Scott Sullivan, Motorola's head of human resources.

Mr. Sullivan expects recruiting to get a lot easier next February when the company moves into a new space in the storied Merchandise Mart building in downtown Chicago.

Motorola will join United Continental Holdings Inc., Hillshire Brands Co. —the successor to Sara Lee Corp.— and other corporate giants abandoning vast suburban campuses for urban offices nearer to the young, educated and hyper-connected workers who will lead their businesses into the digital age. Archer Daniels Midland Co. recently said it would move its headquarters from Decatur, Ill., and in the Bay Area, startups like Pinterest Inc. are departing Silicon Valley for San Francisco.

After decades of big businesses leaving the city for the suburbs, U.S. firms have begun a new era of corporate urbanism. Nearly 200 Fortune 500 companies are currently headquartered in the top 50 cities. Many others are staying put in the suburbs but opening high-profile satellite offices in nearby cities, sometimes aided by tax breaks and a recession that tempered downtown rents. And upstart companies are following suit, according to urban planners. The bottom line: companies are under pressure to establish an urban presence that projects an image of dynamism and innovation.

"The showcase headquarters of the past, the beautiful suburban campuses—that's a very obsolete model now," said Patrick Phillips, CEO of the Urban Land Institute, a land-use think tank.

...

Highly educated workers are clustering in a small number of cities. In 2010, more than 43% of Americans with bachelor's degrees chose to live in 20 metropolitan areas, primarily tech hubs such as Seattle, San Francisco and Raleigh, N.C., according to research from the Brookings Institution. And as younger graduates marry and start families later than previous generations—often with both spouses pursuing careers—they're delaying moves to the suburbs, sometimes indefinitely.

For longtime employees, however, corporate moves to the city mean longer commutes and disrupted schedules and family life.

And the corporate quest for youth and innovation can leave some workers feeling slightly unwelcome.

"We joked about the older suburbanites being excluded from the new [business] model," said Jon Scherf, age 42, a marketing professional who left Hillshire shortly before its December 2012 move to downtown Chicago. "They would've been happy to have me but they're also happy to bring in new blood."

...

Even when headquarters stay put, more companies are opening or expanding urban satellite offices, especially for technology and research staff working on product development and innovation, according to Mr. Moretti.

Silicon Valley giant Yahoo Inc. signed a big lease this year to expand its San Francisco offices so it can recruit top engineers unwilling to make the long commute on Highway 101. And Coca-Cola Co. in June said it would open a 2,000-person information-technology office near its headquarters in downtown Atlanta, relocating some tech staff that had been based in the suburbs.

Overall demand for commercial real estate in the suburbs is strong in metro areas like Sacramento and Dallas, and in regions rebounding from the worst of the housing collapse, said Walter Page, director of research at real-estate data firm CoStar.

However, almost no large firms have left cities for the suburbs recently, CoStar has found.

http://online.wsj.com/news/articles/SB10001424052702304281004579222442197428538

[GandD 5,966]

What's "other?"

[mota bhai 2,675]

I don't know.

[Darnell 8,479]

study skewed and flawed, alas.

[mota bhai 2,675]

study skewed and flawed, alas.

It is borne out by what I'm seeing on the ground though. Financial sector IT hiring around here is all taking place in Manhattan and to a lesser degree Brooklyn and Jersey City/Hoboken. Companies in the suburbs that want IT talent are either settling for mediocre talent in the suburbs or opening up offices in the urban core to get good geek talent.

[SMR 368]

I think that really the drive here is that it's now riskier to be tied to one company. Additionally, the rise of dual income households mean that couples need to work in areas where both have access to good jobs. Basically, if a household needs one job from one company and the expectation is that you can be employed by that one company long term, the suburbs provide an advantage, or at least are on par. The advantage of urban environments is that there are typically lots of jobs available, which lets people move jobs and lets couples both have access to good jobs.