Office buildings in the suburbs of Washington, D.C.

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Which Markets Have the Most Suburban Office Space?

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In the last decade, suburban office spaces have been gaining in popularity due to a variety of factors, including lower overall costs, easier commuting for employees and the availability of developable land.

The COVID-19 pandemic has also contributed to this trend as some companies may be looking for lower-density offices in suburban areas until it’s possible to safely return to normal. As a result, even though offices in central areas will probably keep their central status in the CRE market, the importance of suburban offices stands to increase even further.

To track their evolution, we reviewed the distribution of total office space in suburban areas — regardless of whether it is owner-occupied, leased or available — and divided the markets into several top five lists:

  • markets with the most suburban office space
  • markets with the most square feet of suburban office space delivered in the past 10 years
  • markets with the smallest percentage of suburban office space out of total office space delivered in the past 10 years.

For details, hover over markets on the interactive map below and use the sliders on the left to select markets in a certain range.

Washington, D.C. Inches Out North Dallas in Suburban Office Space

Washington, D.C. features the most office space in suburban areas — 230.6 million square feet, or 58% of the market’s nearly 400 million square feet of office space in all locations. The Washington, D.C. market contains many suburbs in the D.C. metro, including submarkets in Maryland and Virginia.

The largest submarket by suburban office space in Washington, D.C. is Tysons Corner, Va. Its 28.3 million square feet of office space in lower-density areas make it the largest suburban submarket in D.C. and the seventh-largest nationwide.

Dallas-Fort Worth (DFW) came in just behind Washington, D.C. with 229 million square feet of office space in suburban areas — only 1.6 million less than D.C.’s total. However, the Dallas-Fort Worth metroplex relies more on suburban properties, which represent 73% of its total office market compared to D.C.’s 58%. What’s more, three of the nation’s four largest suburban office submarkets are in the Dallas-Fort Worth office market: Las Colinas with 39 million square feet was the largest nationwide, followed by Platinum Corridor North in second with 36.2 million square feet, and Platinum Corridor South in fourth with 30 million square feet.

The markets in the next two positions had an even larger percentage of suburban space out of the total. The Bay Area market features 223 million square feet of suburban office properties in a 261.6-million-square-foot office market. Essentially, 85% of the Bay Area’s office space is situated in suburban areas. Of the market’s total suburban square footage, 28.6 million is situated in the San Jose – North submarket — which was also 2019’s 32nd-most expensive submarket for office space. Palo Alto, the 11th-most expensive submarket on the same list, has 13.3 million square feet of office space in suburban areas.

Similar to the Bay Area, New Jersey was pushed all the way up to #4 by its large share of suburban offices. Of the 212.6 million square feet of office space in this market, 175.1 million is situated in lower-density areas. New Jersey’s five largest submarkets by suburban office space are close in size: Bridgewater (16.3 million square feet), Parsippany (14.6 million square feet), Princeton (13.9 million square feet), I-287 South (13.8 million square feet) and Bergen County Central (13 million square feet).

Closing out our top 5 was the Chicago market with 162 million square feet of suburban office properties. This means that around 50% of the 326 million square feet of office space in Chicago is suburban.

Texas Metros, Bay Area See Most Suburban Office Development in Last Decade

Of the U.S. office markets that saw the most suburban office space delivered in the last 10 years, DFW came out on top with 32.3 million square feet of suburban office space.

The second- and third-largest suburban office projects in the last 10 years were situated in the Dallas-Fort Worth metroplex. These were Toyota Motor North America’s new headquarters in Plano, Texas — which, upon its 2017 completion, amounted to 2.1 million square feet of new office space — and American Airlines’ new 1.8 million-square-foot headquarters to which it relocated from its former Fort Worth home. Owner-occupied properties like these sprawling headquarters outside urban centers greatly increased the share of suburban office space out of total in some markets like DFW.

Houston — another Texas office market — came in third in total office space added in the last decade in suburban areas. In fact, according to a previous study conducted by CommercialCafé, Texas metros added primarily suburban office space in the past decade. In particular, Houston added 29.4 million square feet of suburban space of the total 39.4 million in the market, granting it the last spot on the podium.

Meanwhile, landing between the two Texas office markets was the Bay Area, where as much as 90% of all office space constructed in the last 10 years was in non-central areas. Here, most of the development of the market’s total 31.1 million square feet of new suburban office space was in Silicon Valley. In particular, the Sunnyvale – North submarket added 5.8 million square feet, with the Santa Clara – South and Cupertino submarkets contributing another 4.6 million and 3.8 million, respectively. The largest office building completed since 2010 was Apple Park in Cupertino, Calif. — Apple’s massive corporate headquarters totaling nearly 2.9 million square feet of office space.

Although Washington, D.C. currently has the most suburban square footage, only 42% — or 15.8 million square feet — of the market’s 37.7 million square feet of new office space is in suburban areas. As such, although the Washington, D.C. office market features extensive suburban properties, new projects seem to be concentrated mostly around its urban and central business district (CBD) areas. Tysons Corner was also the D.C. submarket to deliver the most non-central office space since 2010 — 3.3 million square feet.

Salt Lake City made an appearance at #5 thanks to the fact that 15.5 million of the 17.6 million square feet of office space constructed in the last decade was in the suburbs. A large amount of this space is concentrated in the Lehi submarket, which saw 4.3 million square feet of suburban office space completed in the last 10 years. This means that 27% of the metro’s total suburban additions occurred in this submarket, which is part of the burgeoning Silicon Slopes tech cluster.

Low Shares of Suburban Office Development in LA, Seattle & Portland

While the previous cities stand out for their large amounts of office space in the suburbs, development in other U.S. metros is centered on higher-density areas. Here, office projects in lower-density zones represent a lower percentage of the total development. So, for this list, we considered the percentage of newly added suburban office space of the total deliveries in all locations in the last 10 years.

Overall, Los Angeles has the lowest share of new suburban square footage. Only 3.4 million square feet of office space out of a total of 17.8 million was built in suburban areas of the LA office market. However, it’s worth noting that the neighboring Orange County and Inland Empire markets exclusively contain suburban office space, while also being directly adjacent to the Los Angeles market.

Two other West Coast cities — Seattle and Portland — also had a low proportion of development outside of their urban cores. Although suburban office space makes up around 50% of the square footage in both markets, only 25% of newly added office space in Seattle is in lower-density areas. In Portland, the number is 35%.

However, it is worth keeping in mind that West Coast metros generally don’t have expansive suburbs such as those in Texas, mainly due to their geography. This — in combination with other factors, such as accessibility, zoning laws and overall demand in CBDs and urban areas — could partially explain why most of their development in the last 10 years has occurred in high-density zones.

Suburban office development in Seattle was mostly centered around Renton, Northern Seattle and Kirkland. These three submarkets contributed 2.5 million square feet of suburban office space of the metro’s total of 3.5 million square feet delivered.

In Portland, Sunset Corridor is the city’s prime location for suburban office properties, currently containing more than 35% of Portland’s total non-central office square footage. However, when it comes to suburban office properties built in the last 10 years, the Northeast Portland submarket added the most — 780,000 square feet.

Of the 4.7 million square feet of office space that hit the Buffalo market since 2010, only 900,000 square feet was located in its suburbs. Notably, more than two-thirds of all suburban office space in Buffalo is located in the Airport and University submarkets, which also saw the majority of suburban office deliveries — 342,000 and 213,000 square feet, respectively.

Syracuse is the smallest market on this list, with a total of 12.6 million square feet of office space. Of the market’s deliveries, 231,000 square feet is in the suburbs, which equates to around one-third of the office space added in the past decade.

Only One-Tenth of Honolulu Office Space is Suburban; San Diego, Raleigh-Durham & Fort Lauderdale Office Space Almost All in Lower-Density Areas

Our study also revealed some other interesting suburban office trends. For example, the Honolulu market encompasses only 1.5 million square feet of office space in lower-density areas out of a 15.6 million total — a 10% share that can be attributed mostly to the market’s restrictive geography. Still, around half of the market’s 300,000 square feet of office space delivered since 2010 is in suburban locations.

On the opposite end of the spectrum are the San Diego, Raleigh-Durham and Fort Lauderdale office markets, which are primarily made up of suburban office properties. More precisely, 88% of San Diego’s 102 million square feet of office space is in non-central areas, while the percentage is 87% for both Raleigh-Durham and Fort Lauderdale.

Finally, being one of the smaller markets we reviewed was Midland – Odessa, which currently encompasses 9 million square feet of office space in all locations. However, the market’s CBD and urban areas — a result of the oil boom in the 1980s — remained mostly constant. In fact, all of the 1.9 million square feet of new office space that hit the Midland-Odessa market since 2010 is in suburban areas. This makes it the only market on our list with exclusively suburban office developments in the last decade.

Methodology

The study used data provided by CommercialEdge, a service tailored for commercial brokers that offers extensive commercial property data and listings. We analyzed the total square footage of office space in suburban areas, as well as the total square footage of office space delivered in the last 10 years in suburban areas. The study included 40,795 existing office properties in suburban locations from 66 office markets. “Submarkets” are defined as subdivisions of markets, determined according to delimitations made by CommercialEdge.

The office square footage referenced in the article includes only commercial properties larger than 25,000 square feet, regardless of their occupancy status (owner-occupied, single tenant or multiple tenants). Markets that do not contain all three types of office space (CBD, urban and suburban) were excluded. All data was extracted as of June 11, 2020.

The data for office construction in the last 10 years included properties constructed in suburban locations between January 1, 2010 and June 10, 2020.

Although every effort is made to ensure the accuracy, timeliness and completeness of the information provided in this publication, the information is provided “as is” and CommercialEdge does not guarantee, warrant, represent or undertake that the information provided is correct, accurate, current or complete. CommercialEdge is not liable for any loss, claim, or demand arising directly or indirectly from any use or reliance upon the information contained herein.

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