D.C., DFW & Bay Area Are the Nation’s Biggest Suburban Office Markets

As the pandemic is causing some firms to look for satellite offices in lower-density areas, suburban office space could stand to see additional demand.

A recent study conducted by CommercialCafe analyzed which U.S. office markets have the most office square footage in suburban areas and which of them increased office development in areas outside urban cores over the last decade. To be featured in the study, markets had to contain office space in all locations — central business district (CBD), urban and suburban — and only properties larger than 25,000 square feet were included.

The study found that Washington, D.C. has the biggest suburban office market nationwide, with more than 230 million square feet of office space in lower-density areas. A considerable part of D.C.’s sizeable office market is situated in high-demand submarkets stretching into Maryland and Virginia, which are situated outside the metro’s CBDs.

The Dallas-Fort Worth office market came in second, with a total of 229 million square feet of office space in suburban locations. However, this square footage represents 73% of DFW’s total — compared to 58% for D.C.

Non-central office space accounted for an even greater percentage of the total in the Bay Area, which occupied the last spot on the podium. Here, office space in lower-density zones amounts to 223 million square feet, or 85% of the market’s total. Silicon Valley’s tech clusters and headquarters represent a considerable amount of this total square footage.

Closing out the top five list were New Jersey and Chicago. New Jersey features 175 million square feet of suburban office space, while that figure is 162 million for the Chicago office market.

The study also looked at the submarkets that make up these larger office markets and found that three of the four largest suburban submarkets in the U.S. — Las Colinas in the first place, Platinum Corridor North in second and Platinum Corridor South in fourth — are part of the Dallas-Fort Worth office market. Tysons Corner — Washington, D.C.’s largest suburban submarket — was the seventh-largest nationwide, while the Bay Area’s submarkets stood out thanks to their sizeable average prices.

When it comes to suburban office developments within the last decade, Dallas-Fort Worth came out on top with a total of 32.3 million square feet in new suburban office properties. Two properties alone added almost 4 million square feet of suburban office space in Dallas-Fort Worth: Toyota North America’s headquarters in Plano and American Airlines’ headquarters in Fort Worth.

The 29.4 million square feet of non-central office space in Houston brought it the third spot, cementing Texas as a popular location for office properties in lower-density areas.

The importance of suburban offices in the Bay Area was also highlighted by the market’s deliveries in the last 10 years, as 31 million square feet of all new office space — or 90% of the total — constructed here in that timeframe was in suburban areas. Silicon Valley was also home to the largest office delivery between 2010 and 2020 — Apple’s sprawling corporate headquarters dubbed Apple Park with a total of 2.9 million square feet of office space.

While the Washington, D.C. office market currently has the largest total suburban inventory, the square footage added in the last 10 years in suburban areas only amounted to 15.8 million, or 42% of the market’s total deliveries. As such, while D.C. currently features a robust office market outside its urban core, new developments in the last decade were mostly concentrated on the metro’s urban areas.

Salt Lake City’s 15.5 million square feet of office deliveries in suburban areas brought it a fifth-place finish. More than a quarter of the metro’s office constructions in lower-density zones were in the Lehi submarket, which is a part of the booming tech cluster of Silicon Slopes.

You can read CommercialCafe’s full report for a more detailed analysis and other interesting highlights.