Blog Post

You Say Urban, I Say Suburban

American suburbs have been around since the late 1800s and saw explosive growth after World War II, brought on by the post-war economic boom, the baby boom, the need to house returning veterans, and residents wanting to flee urban decay.

More recently, the growth of urban populations took off as Millennials chose the city over the suburbs. The U.S. Census Bureau recently determined that, of the country’s 51 largest metro areas, city centers grew faster than suburbs between July 2010 and July 2011.

As a result, suburban retail took a blow, particularly malls and big box stores. Suburban populations shrank forcing store closings and/or the creation of new prototypes to serve urban populations.

The urban boom, however, appears to be slowing. Just in the last two years, the United States’ largest cities have begun to grow more slowly than the suburbs. In May 2014, the Census Bureau released figures showing that suburban growth was back on the uptick. Statistically, growth in urban areas is still faster than suburban growth, but the gap is diminishing.

In May 2014, Time Magazine reported that, “Of the 51 largest metropolitan regions in the U.S. in 2013, just 18 of them saw faster growth in cities than suburbs in 2013, compared with 25 in 2012.”

Indeed, population shift has been quite a roller-coaster in the last decade alone, leaving many to wonder if the suburbs will ever return as the preferred place to live, breathing life back into suburban retail.

Suburbs will never disappear. In fact, they are changing rapidly, blurring the lines between suburban and urban. We are seeing the construction of fewer cookie-cutter single-family housing developments and an increased focus on mixed-use and multi-family suburban development – places, much like downtown areas, where residents can walk to stores, walk to or catch mass transit to work, and be entertained – all without leaving the suburbs.

One example of the new focus is what the Urban Land Institute calls “suburban arterials or commercial corridors.” These projects rework highly traveled arterials currently bordered by aging strip centers and parking lots. cites Montgomery County, Maryland, as one example of this new focus. Developer Federal Realty Trust is redeveloping a road in suburban Rockville into an urban street by redeveloping an aging strip center into a mixed- use, transit retail-oriented neighborhood. The project, called Pike and Rose, totals 230,000 square feet including 150,000 square feet of retail space, 80,000 square feet of office and 493 residential units. Just a few of the national retailers in the development include Starbucks, Visionworks, Chipotle, iPic Theaters, Gap, Lucky Brand, Del Frisco’s Grille, and Francesca’s.

Dublin, Ohio’s Bridge Street Corridor, currently in planning stages, is another example of this trend. Bridge Street is a mixed-use development comprised of entertainment, dining, shopping, civic space and residential units. The City of Dublin web site says, “This urban, walkable district is poised to be our next economic development driver – attracting new businesses, jobs and a talented, young workforce.”

Will retailers respond to the returning strength of the suburbs?

Fast Company Magazine recently published an article about Mercedes Benz’s current focus on growing in the suburbs. In the article, Eric Larsen, director of Mercedes-Benz’s society and technology research group, says, ” ‘The U.S. is a unique market, with the rise of mega-suburbs, not mega-cities. It’s good news for our company. The car is going to be the dominant form of transportation in the U.S. for the long term.’ ”

Sears Holdings announced in late 2014 that it plans to redevelop some of its suburban auto repair shops into retail developments including mixed-use and lifestyle-type centers. The goal, of course, is to start collecting rent. The sites have already attracted retailers such as Ted’s Montana Grill, Verizon Wireless, Moe’s Southwest Grill, and Mod Pizza. The lines will continue to blur between urban and suburban areas offering new opportunities for developers, retailers and residents.

By Janie French, Director of Business Development.