Interest in commercial real estate has traditionally focused on the downtown core, industrial areas such as business parks and transportation hubs, and retail complexes such as malls and outlet centers. In the last few years, investors, business owners, and tenants alike have started to take notice of suburban locations. If you’re looking for investments, hoping to relocate or expand your business, or need to rent commercial space, suburban commercial real estate might be an excellent option.
What Changed in Commercial Real Estate Trends?
The pandemic accelerated this shift to suburban business locations, but it was already well underway. Factors that led to the change in commercial real estate locations included:
- Higher costs for urban rents, especially for mid-sized companies that didn’t need a prestigious downtown address.
- Building of suburban office space and suburban retail corridors along major interstates is a trend that has been ongoing since the 1980s and 1990s.
- The surge in online retailing, which drove suburban warehouse demand starting in roughly 2012. Logistics networks also expanded to meet faster delivery expectations.
- Population shift to the suburbs as millennials aged into home ownership and started to raise families.
Working from home and hybrid work continued this trend. Businesses started to look for smaller, decentralized office space closer to where employees actually lived. Many companies have maintained or expanded their suburban footprints rather than returning to downtown cores. In the meantime, older Class B and Class C buildings downtown have struggled to recover from the pandemic exodus, with new tenants preferring the upgraded amenities and tech-ready features of Class A buildings.
The Advantages of Suburban Commercial Zoning for Development
Municipalities are recognizing the benefits of commercial real estate on their doorstep and are updating zoning and land use regulations to accommodate additional growth. By attracting investment capital, they generate revenue for the municipality, create jobs locally, reduce commute times for workers, and encourage the development of businesses such as restaurants and amenities, which support inbound industries.
These suburban commercial zoning changes are sparking interest in real estate outside traditional locations. As investors and business owners see former office parks being converted to mixed-use developments and older retail centers being redeveloped into community hubs that blend dining, entertainment, and services, they are imagining opportunities for land use that are a net benefit for everyone involved.
Suburban Retail Growth
One of the biggest success stories in suburban commercial real estate right now is retail. In suburban neighborhoods where foot traffic has remained steady, retail is now picking up steam. Following the sudden shift to online shopping during the pandemic, shoppers have become reinvigorated by the brick-and-mortar experience of going to the grocery store, the book seller, and smaller, walkable clusters of retail shops.
At the same time, large regional malls continue to struggle. Investors interested in suburban commercial real estate are wise to focus on neighborhood shopping centers with a mix of tenants such as fitness studios, restaurants, coworking spaces, and personal services. Attracting the right anchor tenants is key to success in suburban retail real estate.
Suburban Office Space Changes
While downtown high-rises have been losing tenants and investment appeal, suburban office space is drawing interest. Although many companies gave up some or all of their urban office space during the pandemic, some have expanded their suburban footprints to be closer to where hybrid workers live, and to offer better workplace experiences.
Tenants looking for office space are now insisting on upgraded amenities such as on-site gyms, ample parking, attractive interiors, strong connectivity, and technological flexibility. Suburban office investors who want a good return on investment need to understand that tenants will no longer settle for substandard facilities.
Suburban Industries Expansion
Industrial facilities dominate the commercial real estate market in the United States. These facilities accounted for almost 27% of the market in 2025. The demand in this sector is largely driven by the sustained need for warehouse and distribution space to support ecommerce. With plenty of available land, the freedom to design logistics infrastructure, easy access to major highways, lower construction costs, and plenty of workers eager to move out of expensive city centers, the suburbs have significant advantages over urban areas.
Focus on the Chicago Suburbs
The Chicago area is characterized by a dense urban center and sprawling suburbs at the crossroads of the Midwest and the heart of the nation. Despite its prime location, downtown Chicago’s office market has been experiencing vacancy rates of over 26%, a big risk for investors.
Commercial real estate in the Chicago suburbs tells a different story, with a high inflow of tenants and only small increases in vacancies. People looking for a business for sale in the Chicago suburbs, companies interested in suburban office space, and investors hoping to acquire commercial properties in the region will all find excellent opportunities. As a major intermodal hub (rail, highway, air, and shipping) that is near industrial markets, commercial real estate in the Chicago suburbs is ideally situated.
Suburban Commercial Real Estate
Investors and business owners looking for suburban commercial real estate should recognize that markets vary across the country. Local markets each have their own dynamics, populations, zoning restrictions, and opportunities. Change is proceeding at different speeds depending on factors at various levels. Those who will succeed in the current commercial real estate environment will be the ones who know their submarkets well and are prepared for emerging trends.
