Downtown Chicago or the Suburbs: Choosing an Office Location

Companies often come to this decision from a particular direction: a founder who wants to shorten a commute, a CFO looking at a rent line, or a recruiter who has lost candidates. Each is a real input, but none is the whole picture. Moving the office changes commutes for everyone, and it changes who you can hire later. So start by collecting facts about your own company before forming a view of the market.

We will not compare downtown and suburban rents here, since numbers change and depend on the building. What follows is a method you can apply to the real options on your list.

A commute map is the most useful single exhibit in this decision, and it does not take long to make.

1. List home ZIP codes for your team, without names, to protect privacy.
2. Pick three or four candidate points, such as a Loop address and one or two suburban addresses.
3. Estimate door-to-door time at commute hours for each person, by car and by transit.
4. Count how many people get a better commute, a worse one and a much worse one at each point.
5. Look closely at the people whose loss would hurt most, and include future hires you expect to recruit.
6. Repeat it with in-office days in mind, since a long commute is easier to accept a few days a week than every day.

Be careful about how you use the result. A map should not lead to an office that is close to the owners and far from everyone else, unless you are making that choice on purpose. Decide in advance how much commute disruption you will accept, and tell the team only when you have a real proposal.

Rail shapes the downtown side of this decision. Metra lines radiate from four downtown terminals, namely Union Station, Ogilvie, LaSalle Street and Millennium, and CTA lines connect those terminals to the rest of the city. That gives a downtown office access to a wide part of the region without a car.

The reverse commute is the part to check. Getting a downtown resident to a suburban office depends on the line, how often trains run in that direction and how far the office is from the station. The CTA Blue Line reaches Rosemont and O'Hare, which makes parts of the O'Hare corridor reachable from the city. Metra serves Schaumburg and North Shore communities, but a station in a suburb does not mean a station near your office, so check the last mile. Some companies arrange a shuttle, which is a cost to include. Assume less, and verify more, wherever a location relies on a walk from a station.

For driving, look at expressway access in each direction at actual commute times, along with winter conditions and the time it takes to get in and out of the parking. A location that is simple on a map can still be hard to get to at the hour your team would travel.

Where you meet clients may matter more than where your staff sit. A firm that hosts visitors from around the country may value being near downtown hotels and rail, or near O'Hare. One whose clients are in the western suburbs may spend less time on the road from an address along I-88. Consider how often you meet in person, and who travels to whom.

Recruiting is less easy to measure, but it deserves discussion. Who are you trying to hire, where do they live, and what do they expect? Early-career employees and experienced staff may answer differently. Also consider amenities such as restaurants, fitness and other businesses around you, which can vary widely among suburban campuses and downtown blocks.

Parking can decide the question. Suburban offices often have surface or structured parking that is included or inexpensive, while parking downtown is usually a real cost for someone. Read the lease language: how many spaces you get, whether they are reserved, what they cost and whether the rate can change. If you plan to pay for staff parking downtown, include that in the comparison. If staff pay for it themselves, it is still a cost that affects them.

Rent is only one line. A proper comparison includes everything you would pay over the term, in the same format for each option.

• ✓Base rent and scheduled increases, on the same rentable area basis?
• ✓Estimated operating expenses and property taxes, and how are they expected to change?
• ✓Is the location in Cook County or another county, and have we read that tax bill and its history?
• ✓Build-out cost after the allowance, plus furniture and cabling?
• ✓Free rent, and when does it occur?
• ✓Parking cost, employer-paid or otherwise?
• ✓Moving and transition cost, and any overlap with the current lease?
• ✓Expected employee turnover cost if a move makes commutes materially worse?
• ✓Any travel cost change for staff who visit clients?

Property taxes need a specific check. Not every suburban address is in Cook County; for example, much of the Oak Brook area is in DuPage County. Assessment and tax rules, rates and timing depend on where the building sits. Cook County's Assessor explains that the assessed value is only one factor in a property's tax bill, with levies and rates also playing a part. Get the actual recent tax bill rather than relying on a general idea of what the county charges.

If the commute map is close, put proposals out in both places. Real numbers from both a downtown landlord and a suburban landlord often settle a debate that assumptions cannot.

This does not have to be all or nothing. Some companies keep a smaller downtown office for clients and recruiting, along with a suburban base. Others take a suburban office and a coworking arrangement downtown. Two offices add cost and management effort, and they can split culture, so make sure each location has a clear purpose.

TAG is based in Chicago and works for tenants and buyers on both sides of this question. We help you put the commute map and the proposals on one page, so the decision can be made on facts specific to your company. We have no stake in which location you choose.