Survey: Employers flock to downtown
By Sherry Slater | The Journal Gazette
Downtown has become a magnet for local office workers.
That’s the takeaway from The Zacher Co.’s eighth annual office market survey, which was released Thursday.
The city’s overall office vacancy rate was 13.9 percent, half a percentage point improvement compared with 14.4 percent a year ago. Rates have declined five of the last seven years.
Downtown Fort Wayne has the lowest office vacancy rate in the city, the report says. The rate decreased to 9.2 percent despite 95,000 square feet more office space being created with construction of Ash Skyline Plaza. Last year’s rate was 9.8 percent.
“I think it’s really a recruiting and retention issue – especially for millennials,” Steven Zacher said of employers’ desire to move downtown.
National studies have discovered that younger employees prefer to work close to where they live, and they enjoy living in vital downtowns.
Zacher pointed to Ash Brokerage as an example of an employer that has followed social trends. The insurance company’s headquarters was in downtown during the 1980s and ’90s, moved to the suburbs for 15 or 20 years, and now has returned downtown, Zacher said.
When employers move downtown, they often leave behind sprawling suburban campuses, which drives up those office vacancy rates. The recent closing of three for-profit colleges has also increased suburban inventory, Zacher said.
“There will be other users that come along,” he said, citing health care providers, mortgage and insurance companies. “Really, it’s an opportunity.”
Even so, Zacher noted that the types of jobs being created by new tenants in those suburban buildings don’t necessarily pay as much as jobs that have been lost in the Fort Wayne community.
Some employers who have left or downsized local workforces have cut engineering and other technical jobs, he said. But some positions being created are in call centers, where workers typically are paid much less.
At a glance
Office vacancies in Fort Wayne as of October, compared with November 2015:
Northwest quadrant: 15.6%, up from 15.1%
Northeast quadrant: 25%, down from 25.9%
Southwest quadrant: 14.8%, up from 12.3%
Southeast quadrant: 9.5%, down from 16.9%
Downtown: 9.2%, down from 9.8%
Source: The Zacher Co., based on compilation of data from various sources