- Suburban office submarkets with urban characteristics are in the best position to capture occupier demand, and may provide unique opportunities for occupiers to secure space at lower rents and for investors to buy at lower prices in areas that are poised for future growth.
- These “urban-suburban” submarkets are characterized by live-work-play dynamics, including higher densities of office space, housing and retail, as well as transportation access and other amenities. Examples of established urban-suburban markets that offer many or all of these attributes include the New Jersey Waterfront, Santa Monica in Los Angeles and Palo Alto in the San Francisco Bay Area.
- Occupancy rates and asking rents in emerging urban-suburban submarkets are typically on par with the broader suburban markets in which they are located, while established submarkets tend to outperform. Rents in more than 50% of the most established submarkets also exceeded their downtown counterparts.
- Net absorption and construction activity have been disproportionately concentrated in urban-suburban submarkets relative to their share of suburban office inventory.
Connect with CBRE Research:
Scott Marshall
Global Chief Client Officer
Spencer Levy
Chairman, Americas Research & Senior Economic Advisor
Andrea Cross
Director, Capital Markets Research