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Hub and Spoke and Why Every Employer Should be Focused on the Suburbs

Cushman & Wakefield, San Francisco, Seattle

By Eugene McGrane

As I often do when thinking about real estate and the economy, I found myself reflecting on The Power Broker by Robert Caro. In Caro’s masterwork on public infrastructure and the forces that shape our lives, I was drawn back to the story of the Long Island Railway and its collapse under “master builder” Robert Moses. Essentially, a commuter rail service serving Long Island middle class workers commuting into Manhattan in the 1960’s, it was driven into near dissolution and its many riders were forced into their cars. The life they lead was described as “soul sucking” by their families in Caro’s book. 

Some very important things have changed since then. But the lessons learned by that disinvestment in a vital public transit system are strikingly relevant today. When we go back to work, it’s going to be very hard to imagine that BART will immediately return to its 400,000 daily rider count. If say 30 percent of those workers return to their cars to get to work, we will have a commute nightmare that will make us long for the days of a 3 hour round trip commute. 

More important than the shocking increase in traffic we will face, is the breaking of the spell for the super commuters. Humans are an interesting, but by no means unique species, we adjust, and what is once unthinkable becomes normal through repeated experience. Commuting is the boiling frog phenomena of modern life and its deleterious effects are felt up and down the spectrum. However, for the last four months, we have essentially broken the spell. All of a sudden, people are walking downstairs in their homes to work or over to the kitchen. We’ve been spending time with our families and deciding that was what was important all along. Human existence is finite and spending 10 percent of your life in the car or on a train is a lousy way to spend it. And because of COVID-19 people are waking up to the reality that they don’t have to do it anymore. 

Work is important, beyond just the monetary aspects, our work lives are a huge part of our identities and our social connection to society. That connection has been strained by Zoomlife. It’s simply not healthy to work from home 5 days a week. Work-life balance has basically been thrown out the window through the pandemic. At Cushman & Wakefield, we’ve surveyed our clients globally to find out what people are thinking about this forced experiment. The results would have been more surprising if we weren’t all living this every day, but I like to think of them as affirming (the “I’m not going crazy this isn’t just me” kind of affirming).

  • Commuting stinks, well I wasn’t going to spend three paragraphs complaining about it if it wasn’t the main takeaway. 
  • Existing culture is really important. For companies with good management and culture, it’s been difficult, but people feel a real life raft effect from videoconferencing and virtual employee interaction. 
  • Your gender and family situation have a lot to do with how productive and how stressful this has been. We are relying on female employees overwhelmingly to handle the homeschooling, this is going to be a huge factor when we go back to school in the fall. Most families in the Bay Area are two income homes and those of us with children have faced a very different work from home situation than either the Boomers or younger Millennials (full disclosure I’m a member of the Oregon Trail Generation). 
  • Your home situation is determinative as to whether this is working. Millennial workers specifically don’t have a dedicated space to work and concentrate at home. They also need mentorship and direction from their supervisors. A friend described his management job as now including a lot of “checking in on younger workers headspace” through phone and Zoom calls. 
  • Proximity and flexibility are going to be the key factor in employee satisfaction and more importantly productivity. This is going to be even more apparent when school starts in the fall. There is almost no way I see schools opening in the fall. We will be doing distance learning again. 
  • Employees are going to think twice about relocating outside of job sheds as layoffs raise concerns about job security, but most importantly, how to get that next job. Bozeman, Mt. is beautiful and wonderful if your employer will pay you to work there, but what about if you need to get another job? How does everyone’s social and professional network hold up when it becomes truly virtual? I don’t think it does. 

So what is Hub and Spoke?
Principally, we’ve learned that people need a place to work, they can’t and won’t work strictly from home. Smart employers are looking to downsize expensive headquarters space and decamp to the suburbs offering flexible work options for their employees. Employers are doing zip code studies and labor studies to pick spokes in various suburbs to add space closer to home. The Bay Area megaregion is at last facing its reckoning. 

This isn’t new. What’s new is we’ve now test-driven the technology that makes regional offices more relevant than ever. No longer is proximity to the power center of the executives at headquarters the ultimate career track enhancer. If you don’t have to commute, why would you give up that 10 percent of your life? Seriously if median life expectancy is 75, do you really want to essentially die at 67?

Eugene McGrane is an Executive Managing Director of Cushman & Wakefield in the company’s Walnut Creek, CA office.