Fresh demand for downtown office space is leaving the suburbs vacant. Credit unions can even the scales.
The urban centers of America (and the hyper-concentrated downtowns within them) have always been about action. Cars, people, sounds, lights. The suburbs are where young couples go to start families, and, if they’re lucky, find a job near home without the hassle of a commute.
As the commercial real estate market strengthens, that last option might not be one anymore.
An article in the Wall Street Journal details the recovery across the commercial real estate industry. Statistics from a report cited there illustrate the discrepancy between urban and suburban occupancy.
- 14.9%: The national office vacancy rate in downtowns at the end of 3Q10. The rate is the same as it was in early 2005.
- 19%: The national office vacancy rate in the suburbs at the end of 3Q10. The rate is up 2.3 percentage points from 2005 levels.
- 16 million sq. ft.: Suburban office space vacated by businesses in the first three quarters of 2010.
- 119,000 sq. ft.: Downtown office space vacated during the same period.
Make sure to check out the interactive map that accompanies the article for a look at how major metropolitan areas are faring specifically.
So what does this mean for credit unions?
It has particular significance for suburban credit unions. The news means that recent successes in member business lending must continue. And when a member comes in looking for a business loan but uncertain about where to physically locate the establishment, credit unions should point them toward local uninhabited space.
Unfortunately, there are probably more "For Lease" signs than one would like to see in a suburb. But credit unions can be at the front of the movement to get suburbs back in business. One loan at a time.