The Recovery Isn’t About Cities vs. Suburbs
The coronavirus pandemic may have temporarily pushed the urban core off its growth pedestal, but what happens next isn’t a matter of pitting cities against suburbs, according to Marcus & Millichap Senior Vice President of Office and Industrial Alan Pontius, who spoke during a Post-Covid Recalibration webcast on April 27.
The defining features of both cities and suburbs won’t be fundamentally changed by the pandemic, and as the recovery takes hold longer-term, both will likely continue to attract certain demographics over others.
“This is not one wins and one loses,” Pontius said. “I also believe that there will be a large population that wants the urban lifestyle.”
While many in the commercial real estate industry foresee an eventual and full recovery for the office markets of major cities like New York and San Francisco, it doesn’t necessarily mean that the flight to the suburbs will disappear. Pontius views the suburban renaissance as one that predates the pandemic, and although events of the past year may have fueled it, the main driver is a demographic shift in which many 30-something millennials have become keener on suburban living especially to raise families, he said.
One salient impact of the rise of the suburbs during the pandemic has been that demand has increased for two-bedroom multifamily units where one of the bedrooms gets used as a home office, Marcus & Millichap Senior Vice President of Multifamily John Sebree said.