Location, location, location. You’ve probably heard this many times before. In real estate, we use it to emphasize the three most important factors that determine the desirability of a property. When you want your business to succeed, finding the right location for it is the most important decision you will make.
For the longest time, a downtown office was the best way to give a business a competitive edge. Downtown is where the customers are, and since “follow your customers” is the golden rule of marketing, it made sense for owners to go where they would more accessible to clientele.
However, the dawn of the Internet age brought new ways of doing business, and the development of e-commerce and digital communications made it possible to transact without seeing customers in person. Thus, the actual location of business became less important, and many firms, especially those belonging to the creative industry, opted to move to suburban neighborhoods where rent and taxes are often relatively cheaper.
Suburban sprawl vs. urban density
Unfortunately, the same things that make suburbia enticing are the same things that stifle business growth. In the case of creative firms, for instance, the lower population of a suburban area can also mean that the pool of creative talent is limited, and imaginatively exceptional candidates are harder to come by. There’s also the issue of fewer choices when it comes to suppliers, utility providers, and other necessities.
Travel to and from work can also become a problem. To get around in the suburbs, one often has to do a lot of driving. Aside from being time-consuming, it has a negative impact on the environment. To thrive, businesses in the suburbs must streamline their own transportation efforts to make it easy for employees and customers alike to get to them. That’s why many entrepreneurs choose locations where many other businesses can be found, such as shopping malls and commercial centers.
Downtown is the place to be once more
A downtown location puts creative firms in a better position to attract and retain artistic employees who often favor living and working in easily accessible and amenity-laden urban areas. Furthermore, it puts a business in close proximity to other businesses that it interacts with regularly.
And the tax and subsidy benefit that counties offer to attract businesses? They’re no longer as enticing as before. “Municipalities used to offer the lowest tax rates and the biggest subsidies to attract companies. That’s no longer the case,” said Tom Murphy,a senior fellow at the Urban Land Institute.
In cities across the country, creative businesses are capitalizing on the increasing density of creative talent gathering in urban areas. A study conducted by the U.S. Census Bureau concluded that the total metro area jobs located within three miles of downtowns jumped by seven percent between 1996 and 2013. The suburbs still possess about three-quarters of metro area jobs, but quite a few employers are getting lured back downtown, the study said.
What’s true for the US is also true for St. Louis
In St. Louis, an increasing number of creative companies are establishing their base downtown. Elasticity, happy medium, and Konzen are just a few examples, with Elasticity actually turning down a free space offer in St. Louis County and preferring to stay in the commercial district.
“Being in a city sends a cultural message to creative thinkers,” said Aaron Perlut, one of the three founding members of Elasticity. “Most of the agencies doing significant national work are somewhere between downtown and Midtown. There’s a creative core here because there are a certain grit and creative element you can’t replicate in something like New Town.”
Granted, not every business belongs downtown, so before you go shopping for office space, have a clear idea of what you need from your place of business both in the short and long-term. Identifying these needs can be a tedious exercise, but it must be done. A poorly chosen business location can be a difficult and costly issue to overcome.
Whether you are relocating your business or starting a new one, let Cardinal Realty Group help you find the right downtown location. The Cardinal Realty Group can provide turnkey real estate services you need, helping you create an individualized plan to make your next business move as smooth and hassle-free as possible. Get in touch with us today.