Millennials, we are constantly told, desire something different than previous generations. They want to live closer to where they work. They eschew cars for transit cards and suburban homesteads for downtown apartments.
But are these hard and fast trends? Low unemployment makes for an employees’ market, and companies are vying for each and every young professional. But the dilemma that employers have struggled with for the past few years—locate in the suburbs or the CBD—isn’t easily rectified.
Earlier this year, Franklin Partners, in a joint venture with Bixby Bridge Capital, acquired a Naperville office building that previously served as the headquarters of OfficeMax. Franklin Partners is working with Wright Heerema Architects on new designs for the old building, hoping to lure tenants with an amenity suite more in line with what is typically found in downtown skyscrapers.
At 31 years old, the 350,000-square-foot structure at 263 Shuman Boulevard is pretty much a millennial itself. After a long existence as a corporate headquarters location—first built in 1987 for AT&T—its new life will be as a multi-tenant office building. The main entrance and atrium will be redesigned with a grand staircase and stadium seating leading down to a bright, airy lower level featuring baristas, a market-style deli, full fitness center, coworking lounges and other amenities.
Franklin Partners and Wright Heerema have redeveloped properties together for more than 15 years in Chicago, its suburbs and in Western Michigan, often bringing amenities typically found in popular city centers to smaller markets. This experience leaves both developer and architect unconcerned that such robust amenities can’t be sustainable in a suburban office park low on foot traffic.
“Even with all of the redevelopments that we’ve done in the city, all of those are scaled to the particular building. The fitness center, the amount of food, the amount of Wi-Fi lounge that you might have, it’s all scalable,” said Roger Heerema, principal at Wright Heerema Architects.
What’s more, Heerema points out, 263 Shuman Boulevard is on the larger end of the spectrum for suburban office buildings. There should be a significant worker base around which the amenity centers can create a sense of community.
According to Ray Warner, partner at Franklin Partners, this project checks a lot of the boxes that young professional workers want, including spaces for food service and health and wellness. But not all suburbs are created equal, and the building’s access to Naperville’s social center is something they plan to take advantage of as well.
“Downtown Naperville is not that far and it’s somewhat of a scenic part of town,” Warner said. “There are also nice bike paths in close proximity.” Franklin Partners, which will operate the redeveloped building, is exploring bike share programs to leverage that existing infrastructure, as well as transportation options for reverse train commuters.
Both Warner and Heerema are bullish on the suburban office market in the age of the millennial. So is there any merit to the idea that Chicago’s recent spate of corporate relocations—largely from the metro’s suburbs—is a surefire way to attract young talent?
“That is definitely the perception, but I don’t think it’s the complete reality,” Heerema said. “There’s been a lot of speculation that this a short-lived trend and in the next five to 10 years will we see an outflux of millennials. My response to that is yes and no.”
One of the Chicago metro’s strengths for the office sector is the variety of strong submarkets, such as Central DuPage and of course downtown Chicago. Zurich North America’s decision to relocate its headquarters from Schaumburg to elsewhere in Schaumburg is testament to this. The insurance company moved into a 738,000-square-foot, LEED Platinum building in 2016, signaling their belief in the strength of the suburban office model.
“We’re really trying to bridge that gap and give people options. Whereas I understand why people are in the city, we still feel that there are people that are committed to the suburban markets,” Warner said. “And we feel that by addressing the amenity base that a lot of younger individuals are attracted to, this is going to be a good tool for employee retention.”
While companies have shown some trust in the suburban corporate parks, there’s no denying that the youngest working generation has indicated that its wants aren’t necessarily in line with those of generations past. They value higher walkability and less dependence on automobiles, two features that tend to drive them to transit-oriented developments.
But TODs and proximity to transportation hubs need not be limited to Chicago neighborhoods, or even be dependent on transit to downtown Chicago. As suburbs try to offer more centrally located community amenities mirroring those offered downtown, young professionals are taking notice. In fact, millennials led home purchase activity for the fifth consecutive year last year.
“There’s still a little bit of downtown in some suburbs that have interesting and walkable things right there. I think [millennials] are going to be looking for a lot of the same qualities that they’ve enjoyed in the city,” Heerema said. “And those developers that can respond to that will win.”
Construction on 263 Shuman Boulevard is scheduled to begin later this year and completion is set for early 2019. The Colliers International team of Francis Prock and David Florent, both principals in the firm’s office advisory group, will serve as exclusive leasing agents for the renovated offices.