Office Success: Not Just SOMA and Silicon Alley

NEW YORK CITY—As the office sector’s recovery becomes broader-based, some markets nonetheless are pulling ahead of the rest. Those markets, says a report from Savills Studley, fall into two camps: those that offer the most specialized talent and those that provide substantially lower costs of doing business. “In many ways, this is a re-emergence of a familiar pattern, the segregation of site selection into knowledge/talent centers and lower-cost back office operations,” the report says.

The clear winners are neighborhoods such as SOMA in San Francisco and Silicon Alley in Manhattan, which have an edge in attracting millennials to urban cores. However, Savills Studley says the suburban corporate campus is “far from dead.” Consider the example of Google: while it has a significant presence in Silicon Alley through its ownership of 111 Eighth Ave., “the mothership is still in Mountain View, CA.”