Suburban Offices Stay Vacant While Central Cities Recover

Eliot Brown reports for the Wall Street Journal that “[v]alues of office buildings in cities such as New York, Washington and San Francisco have been recovering strongly in an unexpected, surprisingly rapid turnaround” while the “suburban office market, a sector dominated by corporate office parks near highways, is being left in the dust by the recovery of major U.S. downtowns.”

All things considered, that’s OK news for America. It’s better for the environment for business activity to be located downtown where transportation networks coalesce and where mass transit is available. But of course from an economic point of view, it’s a shame to see economic resources going un-utilized. But if tastes and conditions are changing to give a structural advantage to downtowns, that’s something the market ought to be able to accommodate. Here in downtown DC, for example, the tallest office buildings are 110 feet tall. In Boise, Idaho by contrast, they have technology that’s allowed them to create a 267 foot building, and in Baton Rouge, they’ve somehow figured out that it’s possible to build a 450 foot building. If we could somehow import that kind of know-how to DC, then I bet people would be employed first building the structures and then working in the buildings. If rents were lower in DC, for example, then an institution like CAP could employ more people on the same budget.

But how on earth would we figure out how to build a 450 foot building? What magical technologies have they developed in Baton Rouge?