The latest trend, “surban” or the new suburban, denotes the sweet spot between city living and suburban space that millennials and young families are migrating to. A surban neighborhood typically provides the most sought after features and facilities from both urban and suburban living. Based on a new ULI Demographic Strategies for Real Estate report, surban areas are projected to attract the most households in the U.S. over the next ten years. The majority of people will opt to rent instead of own homes, ramping up the demand for single-family rentals.

Contradictory to the redevelopment of urban downtowns, the suburbs will bring at least 80 percent of the oncoming wave of new households as younger families seek urban facilities combined with more child friendly housing and strong education offerings typically associated with the suburbs. Surban areas were previously referred to as “mixed-use” developments and are the hot topic amongst the real estate trend predictors. Characteristics include being anchored in locations with highly rated schools and low crime rates.

The report also categorizes the U.S. population by the decade they were born, instead of generation, which assists in studying behaviors that dictate trends. The most significant groups emerging from the report are below:

  • Innovators – those born between 1950–1959, who led a technology revolution;
  • Equalers – those born between 1960–1969, who achieved increased equality between women and men in the workplace;
  • Balancers – those born between 1970–1979, who pushed a shift toward a better work/life balance;
  • Sharers – those born between 1980–1989, who drove the transition to the sharing economy;
  • Connectors – those  born between 1990–1999, who spearheaded 24/7 wireless connectivity; and
  • Globals – those born 2000–2009, who naturally think and interact globally.

Retail facilities are crucial, but not the big-box kind. Millennials want boutiques and mom-and-pop shops stocked with unique items. Transport infrastructure represents another factor in attracting young homebuyers to a surban area. These individuals are seeking homes near public transport along with being bike friendly.


Millennials are great at spotting some surban factors on their own, such as the presence of summer festivals, concerts and street festivals, while property agents notice more subtle signs. Surban towns are communities that are developing relatively new housing projects near a town center. They almost always house a college or university nearby and tend to have ancillary businesses nearby catering for the increase in young families. Daycare centers and upgraded playgrounds can be an indicator of a neighborhood undergoing turnover. Families who contributed to making the neighborhood trendy in the 1990s have raised their families and since moved on, leaving a wave of millennial homebuyers seeking value for their hard earned money.


Below represent several of the trends represented by the groups above.

Surban developments will replace retail centers

Surplus retail centers will be transformed into areas that sell experiences as opposed to goods. These are referred to as “omnichannel” stores. More developments will combine housing and retail to satisfy consumer demand for areas that provide convenient, car-free shopping. An 86 percent surge in household formations in the coming decade will further drive retail activity – in particular purchases by renters, who will make up 58 percent of the new households.

Ghost malls are being replaced by a more pedestrianized, diverse commercial and retail combination, more representative of a city street than a shopping center. One prime example is the CityCentre development in Houston, Texas – a previous mall on the edge of the sprawling city that many view as a dividing line between urban and suburban living.  

The success of the development is attributed to its ability to house mixed-use facilities and its integrated approach. CityCentre’s selling point is its accessibility and events along with a combination of retail and walkable office space. In comparison to other multifamily developments with competition for facilities such as theater rooms or wine cellars, CityCentre’s main attractiveness is the bustling faux urban lifestyle it offers to its inhabitants. Residents still require cars to get to their jobs and do things like go shopping outside of their development, however, car pools and transport apps like Uber are changing that game as CityCenter was reported to be one of the most popular Uber destinations in the Houston area.  


Office demand in suburban areas will return

As “sharers” phase into more senior roles and begin families, many will move from urban core areas into the suburbs to frequent areas with highly rated schools, and near employment hubs and recreational / leisure facilities. Many of these sharers will be willing to share space and work remotely if required.


Over the long-term, housing rental rates will surge

The de-emphasis on ownership as dictated by the sharing economy will be reflected via soaring demand for rental units. Significantly more than half of the 12.5 million new households emerging over the next decade will rent, including those who have never owned, along with those who want to switch from owning to renting to as they grow older. The ownership rates of homes will decrease, with the national rate expected to be almost 61 percent by 2025 – the lowest point since the 1950s. As more innovators join the large pool of retirees, competition for employees will ramp up the wages, adding to a favorable environment for rent hikes.


Migration to Southern surban regions will continue

The Southern regions of America currently house 42 percent of Americans and are expected to see 62 percent of household growth in the U.S over the next decade. Requirements for affordable rental housing, townhomes, and small detached housing will continue to rise, as Connectors join Sharers in rearing families.  


Municipalities will deliver  a more impactful role in stimulating growth

Revitalization investments by local government have transformed certain urban and suburban areas, in particular, waterfront and riverside areas like Chicago and Pittsburgh. Any strong municipal leader will in a suburban or surban area will remain altering zoning regulations and other enhancements, to stimulate mixed-use, walkability friendly development projects that suit the preferences and requirements of new households.

The report also directs to four demographic factors which have substantial potential to create opportunities for real estate professionals.

  • The steady rise of women in the workplace

Currently, women earn 58 percent of all college degrees in the U.S. and 38 percent of the time they earn more compared to their spouses. Projections state that by 2025, the number of women in the workforce will shoot to 78 million – 8 million above the levels in 2015.


  • An increasing number of affluent immigrants

By 2025, immigration will account for more than half of the total U.S. population growth. On the contrary to some perceptions, the majority of immigrants coming to the U.S. are highly educated middle and upper class families possessing significant purchasing power.


  • The graying of America

By 2025, 66 million Americans will be above the age of 65, that’s 38 percent more than in 2015, as innovators grow older. Given the largely varied requirements and lifestyles of younger retirees versus older ones, this opens up lucrative opportunities for customer segmentation for marketers.


  • Young adults are driving household formation

Despite forming households at a slower rate than their predecessors, connectors will spearhead the majority of new household growth throughout the next decade. By 2025, they are expected to create 14 million households. Globals are anticipated to create nearly 6 million households, and sharers are expected to create more than 4 million households.


Laying down the path for Surban Areas

To really come to terms with the meaning of a surban area, below are two examples.

Reston, Virgina

Reston, an internationally known planned community in Virginia was created in 1964. Robert E. Simon Jr bought the Northern Virginia farmland 20 miles outside of Washington D.C., with the vision of creating a community that would embrace walking, access to green spaces and a diversity of races and income levels.

In 1990, the iconic Reston Town Center opened. The town center is described by CityLab as “a dense cluster of offices, restaurants and shops, centered on a wide-open plaza with a fountain…a community gathering spot.” Almost 24 years later, Reston’s Silver Line Metro station opened, ultimately smoothing over the few cracks in the center’s connectivity by reducing the need for cars.


The Cannery, California

The Cannery – labeled as a farm to table project in the small city of Davis, California. The 100 acre planned community is built on the site of a former Hunt-Wesson tomato packing plant offers a different spin on traditional suburban-style living.

The Cannery offers a variety of homes with names such as Sage, Tilton, and Persimmon, ranging in price from $450,000 for a townhouse to $1 million for a single-family residence. The project, created by SWA, also boasts a 10 mile network of bike paths, solar powered lighting, a spa, a communal barn for events and gatherings, along with a 7.4 acre urban farm run by the local Center for Land Based Learning that teaches planting and harvesting to the approximately 135 families who call the development home.

A major appeal by the development is that it caters to “foodies” and the increasing focus on healthy living. This is only one element of the development according to Kevin Carson – the site’s developer. When his company was creating design plans for the project, the implementation of focus groups assisted in how they would market the development. This resulted in emphasizing a sense of community and a walkability lifestyle, not the ability to go weeding a garden.

Carson also views the development’s spaces and 171,000 square foot mixed-use area of stores, offices and coffee shops as another element of The Cannery’s unique offering. The “back-to-the-land” theme being projected out at an urban price point may be a source of eye rolling for some, but the strategy by The New Home Company – placing upscale residential areas within a mixed-use, town square style community close to downtown, reflects how many modern developers are considering building large-scale developments, especially in suburban areas, creating surban locations.

Contemporary property developers such as The New York Home Company are changing the landscape for mixed-use developments – in response to the market demands for an urban lifestyle regardless of zip code. Surban developments represent a new take on a classic problem of those building far from dense urban areas.



The Future of Surban

As is evident, suburban downtown areas are popping up throughout the country. Although Reston wasn’t the only location creating a blueprint for “surban” developments, it is regularly referred to as one of the best success stories.


Listed below are some of the other notable surban developments:

  • Downtown Naperville in the suburbs of Chicago
  • Old Town Pasadena in the suburbs of Los Angeles
  • A-Town in Anaheim in a neighborhood around the Angels Major League Baseball park
  • Legacy Town Center in Plano in the suburbs of Dallas
  • Santana Row in San Jose on a former rundown mall site
  • City Centre in Houston on a former rundown mall site
  • Downtown Tempe in the suburbs of Phoenix
  • Larkspur north of San Francisco, with new housing between a reputable high school and a rejuvenated old downtown
  • Geneva in the suburbs of Chicago

In summary, living areas like those noted are expected to have a profound effect on many areas of real estate within the next few years. Experts in the space anticipate that surban developments will replace shopping centers. More retail stores will become places that sell experiences versus goods, and more development will offer a mixture of housing and retail to satisfy consumer demand for locations that provide convenient car-free shopping. Suburban office demand will further return as Generation X and millennials transfer into more senior management positions and begin families they will migrate from urban cores to the suburbs. They will seek areas with good schools, that are also near employment hubs, entertainment and leisure / recreational facilities. They will also be willing to share space and work remotely at times.  


How CRE professionals can leverage the surban trend

If you are reading this as a real estate professional, the main question that will be popping up around your head will be what can you do to take advantage of this trend?

  1. Pinpoint the current and up-and-coming surban areas in your market; familiarize yourself with them.
  2. Familiarize yourself with the potential for surban living. The real power behind this trend is the buyers’ preference for amenities and lifestyle, as opposed to the traditionally marketed home features in real estate. Create and execute a marketing strategy taking this fact into account.
  3. Leverage social media to promote and identify surban communities in your area.
  4. Think about what else you can do to become a real estate leader as this unique movement continues to grow.


An additional technique you can do is leverage platforms like Reonomy – a technological database of 47+ million properties across the U.S. With a range of search filters, such as search by location, search by asset type and search by year built, you can completely tailor your search based on your needs. For example, you can search for vacant land in any area of your choice, that you recognize as a space for a potential surban development. As shown in the screenshots below, a simple vacant land search in Florida brings up 1,613,043 results.



To discover the tool’s capabilities for yourself, sign up for a free trial today.


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