Alan Rappeport, CFO Magazine
October 1, 2007

Impact of financial center domination on back office locations

Alan, as a commercial real estate advisor, I found the subject of this article very intriguing. First off, I'm a bit bummed that Chicago - my home - didn't make the grade for "The Emergence of Financial Centers" chronology at the end of the article.

Other than that, I found the analysis spot-on. With a background in computer technology, I have found that emerging collaboration tools and rapidly accelerating communications infrastructure are significantly impacting how employees work with their colleagues internally and business partners externally. On my blog, I just wrote about a similar phenomenon impacting the need for office space - http://corporaterealestate.wordpress.com/2007/10/05/increasing-productivitydecreasing-office-space-needs/ - but I digress.

In addition to your analysis on the changing landscape of financial centers, I would like to expand on Craft and Venables's quote regarding back office relocation. As firms slough off their back office employees from their flagship offices in the financial centers, those "depleted manufacturing cities" that you mention earlier are receiving significant benefits as "second tier" office markets that can accept those divisions of firms. We have seen it in our industry, with cities like Hoboken, Milwaukee and Duluth accepting back office teams from firms with front office operations in Manhattan, Chicago and Minneapolis, respectively. Thankfully for those second and third tier cities, this phenomenon is providing a nice trickle-down benefit.

Posted by Jacob Cynamon | Oct 5, 2007 7:22 PM ET