In many cities around the nation, the difference in the costs of operating an office downtown or in the suburbs has narrowed so much that it hardly pays to move out of most downtown areas. But Washington is bucking that trend, according to a recent survey by a national moving consultant.
The average cost of operating a 300-person office for a year in the District is $9.955 million, compared with a $9.286 million average in the Washington suburbs, a difference of nearly $700,000 a year, said the study by Metropolitan Consulting Group.
MGC used the costs of payroll, MGC used the costs of payroll, actual rent, telephone and travel, unemployment insurance and workers' compensation to determine the cost of running an office in different cities.
While the study found little difference between downtown and suburban office operating costs in most big cities, Washington was not alone in showing a wide difference. In New York City, the annual cost of operating a 300-person midtown office is $1.9 million more than a suburban office the same size.
Downtown Kansas City and suburban Atlanta are the most economical cities in which to do business, while New York City, followed by Los Angeles, is the most expensive, the survey said.
In the future, one in every four offices in the United States will move across county lines or across the country as corporations look for ways to cut costs, according to Metropolitan Consulting.
"The difference in operating costs among and within geographic regions will be a key factor in future office location decisions," said L. Clinton Hoch, president of Metropolitan Consulting.
Washington, where the annual costs of operating offices are in the middle of the 10 cities most likely to attract corporations that move, will continue to draw companies and nonprofit organizations and associations, Hoch said.
However, "the important thing is that we're getting a no-growth attitude in Fairfax and Montgomery County that is going to divert more and more attention to Prince George's, Anne Arundel and Howard" counties, Hoch said.
In the future, Washington and other cities may witness a tendency for companies to break up corporate headquarters and administrative facilities, Hoch said. "Today, with modern telecommunications and travel, there's no need to locate in any one place."
Hoch, who was the consultant on the move of Mobil Corp.'s marketing arm to Fairfax County several years ago, cites Mobil's plans to move the rest of the company to Fairfax as an exception to the trend of breaking up the monolithic corporate headquarters.
Metropolitan Consulting's study cautions that issues other than cost should be taken into consideration.
Quality-of-life issues -- such as good education systems, cultural institutions, recreation and housing -- should also be considered as ways to keep and attract personnel, Hoch said. A separate study by the National Association of Realtors showed that office workers in the Washington area paid the ninth-highest median cost in the country for houses in the fourth quarter of 1987 -- $122,400. The national median home price during that quarter was $84,300.