Mixed-Use “Lifestyle Office Markets” Defy Broader Office Market Challenges, Commanding 32% Higher Rents

CHICAGO, Sept. 03, 2025 – Office properties in vibrant mixed-use districts are dramatically outperforming the rest of the U.S. office market, thanks to post-pandemic demographic shifts and growing preferences for live-work-play environments, according to JLL's Lifestyle Office Markets research report released today.

The report identifies "lifestyle office markets" as mixed-use regions that combine urban amenities with suburban accessibility, featuring moderate density, convenient transit options, diverse, high-end property types, strong amenitization, walkability, and 24/7 activity.

Currently comprising just 4% of U.S. office space, JLL projects that these properties will grow to represent 30% of the national office inventory by 2040, as both workers and businesses increasingly favor locations offering convenience, community, and experiences beyond just workspace.

“We are witnessing a structural shift in how the market values workplace environments, with massive implications for investors, developers and municipalities alike,” said Jeff Eckert, President of Americas Office Agency Leasing at JLL. “As workplace strategies evolve, organizations are increasingly willing to pay a premium for location-based amenities that offer their employees authentic, engaging experiences that cannot be replicated through a screen. The future of office space is about creating environments where people genuinely want to be.”

Key findings from the report include:

• Superior leasing performance: Office properties in lifestyle office markets command a 32% rent premium over other Class A office space, lease up twice as fast (90% leased in two years versus four years for traditional developments), and maintain significantly lower vacancy rates (12.5% compared to 22.5% for the overall office market).
• Institutional investor momentum: Institutional capital allocation to office properties in lifestyle office markets has grown from minimal levels pre-2015 to more than 8% of institutional office acquisition volume nationwide in 2024.
• Popular location-based amenities: Location-based office amenities compound rent premiums, with top features like sports and entertainment venues (+313 basis points “bps”), waterfront locations (+284 bps) and green space (+180 bps) providing measurable value enhancements.
• Market transformation strategy: Both traditional urban cores and suburban business parks are incorporating "lifestylization" initiatives as part of revitalization efforts by upgrading properties, increasing the diversity of property types, and adding amenities like dining, entertainment, and greenspace.
   

“The pandemic and subsequent push and pull of remote work awakened office tenants to the reality that experience and environment are crucial for attracting and retaining talent,” said Jacob Rowden, Senior Manager of U.S. Office Research at JLL. “Companies are flocking to vibrant, mixed-use areas with synergies among diverse property types that create a sense of energy and engagement. As office tenants prioritize these areas and cities reimagine one-dimensional business districts, dynamic Lifestyle Market nodes represent the office market of the future.”

Sports stadium-anchored mixed-use districts are a prominent type of lifestyle office market that is growing in popularity, thanks to the success of projects like The Battery in Atlanta. Located next to Truist Park, home of Major League Baseball’s Atlanta Braves, The Battery is a 74-acre development that includes over two million sq. ft. of office, retail, multifamily, hotel, and entertainment venue space. It features 630,000 sq. ft. of office space that has a direct availability rate of just 0.5% (compared to a 25.9% rate for metro Atlanta). Other sports-anchored developments with low office direct availability rates include The Star in Frisco, Texas (3.2% compared to 23.4% for Dallas-Fort Worth) and District Detroit (12.1% compared to 18.3% for Detroit).

As demand for lifestyle office market space continues to rise and investors increasingly prioritize complementary real estate ecosystems, more sports-and-entertainment-anchored mixed-use projects are being proposed across several cities involving a variety of professional sports organizations, such as the National Football League’s Washington Commanders and Major League Soccer’s Chicago Fire Football Club.

The resilience of lifestyle office markets is attributed partly to post-pandemic demographic and economic forces, as well as evolving workforce dynamics. Housing affordability, perceptions of crime, and slow recovery of office attendance drove down population and activity in downtown areas after the pandemic, while hybrid work policies and competition for talent accelerated demand for office space in live-work-play environments.

Successful lifestyle office market examples include both suburban districts like The Domain (Austin) and Reston Station (Washington, D.C. area), as well as urban districts like Hudson Yards (New York) and The Wharf (Washington, D.C.).

Additionally, many submarkets on the edge of central business districts have organically developed lifestyle office market traits. Since 2019, office occupancy in these vibrant urban-edge districts has climbed 24.8%, compared to a 7.5% decline in occupancy for other CBD office space. Examples include Boston's Seaport, Chicago's Fulton Market, and Miami's Wynwood district.

For more information, download the full "Lifestyle Office Markets " report at jll.com/research.