A former high school class mate of mine was recently named CEO of Tishman Speyer, a real estate development and holding company in New York. The company specializes in large urban properties and its portfolio includes such notable buildings as Rockefeller Center and the Chrysler Center in New York as well as many other skyscrapers in cities including Chicago, San Francisco, Shanghai, Frankfort, Sao Paulo, Paris & London. They are heavily vested in highly populated cities where there is nowhere left to build, but up. Last year Rob Speyer spoke at an Urban Land Institute meeting and said, “People have been talking about how technology was going to make cities irrelevant since the automobile was invented. After the car, it was the telephone. After the telephone, television; and after television, the fax machine, teleconferencing and now, the Internet. But what I’m seeing in major cities across the world is that the Internet is actually making them stronger and more critical to the future than ever.”
This quote got me thinking about our small city and the surrounding areas in Northern Michigan. While growth in past decades was centered around malls and suburban subdivisions, we have seen a surge in demand for downtown Traverse City properties in the past couple of years. The further one goes from downtown, the less demand there is for the property. This is reflected in rents and sale prices, the number of days a property is on the market before it sells and the number of inquiries for space in downtown versus the outlying areas.
As Millennials graduate college and enter the work force they are moving out of the suburbs and into downtowns. They are choosing to live near their peers, near work and be more socially engaged. They are reducing their use of automobiles and choosing areas that are more walkable and bikable. In fact they are more likely to spend their money on an expensive phone than on transportation.
The Internet and smart phones have enabled people to work from almost anywhere and not just from the office. As people spend less time in the office and more time at home, the local coffee shop, a restaurant or public spaces, proximity to those secondary spaces become more important. Being close allows more flexibility in the daily routine and decreases the monotony of sitting at a desk all day long, or working alone at home.
Businesses trying to attract talented workers are locating to vibrant city centers as this is where the young workforce wants to be. They need the social aspect of an urban environment to entice employees to want to work at their company. Businesses are setting up shared office spaces with lounge space, coffee bars and large open areas to entice workers. They don’t need as much space since workers are sharing more space and spending less time in the office. More important than large private offices is the walkability of the area and close proximity to restaurants, public parks, waterfront and being surrounded with like-minded people.
Walking through Traverse City’s downtown is always a pleasure. We have nearly 100% occupancy of the street level with a great mix of stores and restaurants, historic buildings, trails and parks along both Grand Traverse Bay and the Boardman River. We have a strong downtown association that is helping Traverse City grow, be vibrant and remain relevant. The abundance of events downtown keep residents and visitors engaged and interested. In fact the installation of free Wi-Fi throughout downtown is another testament to the importance of being able to work and play in our prospering downtown and keep Traverse City a growing and desirable place to be.
Dan Stiebel, CCIM