67% of U.S. Office Space Built in Suburbs Over Last Two Decades
Suburbs seem to have become more popular in terms of office space development compared to cities. This is because suburban areas boast several benefits – land is cheaper and more plentiful outside of major cities, allowing for larger and more expansive office buildings and campuses, as well as providing better parking facilities. But how exactly does this shift look like, by the numbers?
A new report from CommercialCafe analyzed office buildings in 50 top U.S. markets across all urban, suburban and central business district (CBD) locations to determine where growth and expansion occurred in the last 20 years. The report used data from CommercialEdge and looked at the office footprint found in each area.
While the study points to an overall 67% growth focused in suburban areas between 2002 and 2021, some of the country’s areas still showed significant office space development in urban and CBD areas. Read on to find out more:
Pacific Northwest and Northeast Regions Concentrate on Urban Office Spaces
In the Pacific Northwest, some cities like Portland have implemented restrictions on development outside city limits to curb urban sprawl. The region is also mountainous, making it more difficult to build here. Therefore, most office space added has been in urban areas (51%), totaling nearly 41 million square feet, while office space added in suburban areas makes up 42% — over 33 million square feet.
The Northeast region has seen more office space square footage added than any other region, with more than 300 million square feet across 2,362 properties. Because expansive cities like New York and Boston are found here, there is limited land for building, so 53% of the office space added is in urban and CBD areas. The remaining 47% consists of a little over 141 million square feet of office space built in the suburbs.
West and Southwest Regions Focus on Suburban Office Space Expansion
The West and Southwest regions have seen a significant amount of suburban office space added. With more than 240 million square feet of office space across 2,463 properties, the Southwest has added the second-most office space of all regions. Here, 80% of office space expansion occurred in suburban areas, with over 191 million square feet. In comparison, urban areas in this region saw just 12% (over 28 million square feet) of the overall added office space. Fast-growing markets and cheaper land outside of cities have likely led to the boom in suburban office space expansion.
The suburbs of large cities like Phoenix, Denver, Las Vegas and Salt Lake City account for 81% of all office space built in the Western region (over 138 million square feet). In comparison, urban office space development made up 15% (nearly 26 million square feet) of the office space added here. This region also added the most office square footage as a percentage of total 2022 stock.
Eastern Cities Differ in Urban/Suburban Office Space Additions
On the East Coast, office space built in Florida was predominantly suburban, at 81% or over 81 million square feet across 1,153 properties. Less than 3% (25 properties) were added to CBDs.
Washington, D.C. saw a mix of urban/CBD (47% or close to 49 million square feet) and suburban (53% or close to 56 million square feet) added office space. Along with Charlotte, D.C. was one of the cities with the most office space added to its urban and CBD areas.
Charlotte’s impressive growth included nearly 7 million square feet of office space across 14 properties in the CBD area (21% of the total space added in the market overall), and the city mostly saw suburban office space added (66% or over 22 million square feet).
Baltimore and Atlanta, on the other hand, recorded significant growth in their urban areas (8.3 million square feet and 16.6 million square feet, respectively).
California Mixes Urban and Suburban Office Space Growth
Office space growth in Los Angeles was primarily focused in urban areas, with 57% or over 23 million square feet added across 211 properties, while the city’s CBD area accounted for just 7% of the office space added (2.9 million square feet across 31 properties). Furthermore, less than 15 million square feet, or 36%, of added office space occurred in suburban areas.
San Francisco had a somewhat even mix of suburban (55% or more than 23 million square feet) and urban (44% or more than 18 million square feet) office space development. Interestingly, only one property was constructed in the city’s CBD area in the past 20 years.
San Diego and the Bay Area were markedly suburban when it comes to office space added, with nearly 27 million square feet across 268 suburban properties in San Diego (an impressive 91%) and 375 suburban properties consisting of 55.6 million square feet found in the Bay Area. Startup and tech campuses make up a large part of the suburban office space in these areas.
Midwest Region Sees Predominantly More Suburban Than Urban Office Footprints
Chicago is the only market in the Midwest region that added more urban than suburban office space. Urban and CBD areas made up 56% of added office space here (totaling more than 33 million square feet), with more than half of that in the CBD area. Conversely, 44% (or close to 27 million square feet) of office space was added to the city’s suburban areas.
Other cities like Nashville, Birmingham, Milwaukee, Omaha, St. Louis, Cleveland and Minneapolis-St. Paul had the majority of their office space added to suburban areas. St. Louis had 88% of its office space added to suburban areas, and Cleveland had 80%. Nashville, the Twin Cities and Birmingham each saw 67% of their added office space occur in suburban areas, while Omaha recorded 71% and Milwaukee 60%.
Interested in the office or shared spaces market in the areas mentioned in this study? Check out the links below: