Think grown-up college campus. A walkable place to dine, work, live and play. RIP strip mall retail and move aside giant suburban malls.
A few months ago, we published a post on urban design and the sociological trends which create the need for it. Sure, we know urbanism is not a new concept. Today we are witnessing the movement of "New Urbanism" and the needs attached to the movement:
- Natural and Organic
Now these urban characteristics are being met in the suburbs, too. Enter the Suburban Town Center.
The Original Town Center: Reston, Virginia
In 1964, an internationally known planned community known as Reston, VA, was founded. When Reston founder Robert E. Simon Jr. bought the Northern Virginia farmland 20 miles outside of Washington, D.C., he had the vision of developing a community which would embrace walkability, density, access to green space, and a diversity of races and income levels.
In 1990, Reston Town Center opened. This iconic 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." Nearly 24 years later, the Silver Line Metro station opened in Reston, which ultimately perfected the interconnectedness of the community and city center by decreasing the need for cars.
When Reston Town Center was nearing completion in 1990, Kenneth P Wong, senior development manager for the town center project, told the Washington Post:
"The idea of a downtown in the suburbs was something that no one really had a grip on, it's a very complicated proposition that needed a long [research and development] gestation period."
Today, these suburban downtown areas are popping up throughout the country. Though Reston wasn't the only place developing the blueprint for "Surban" developments, it is often referred to as one of the most successful influencers.
"Surban" Developments Today
In a new report by John Burns Real Estate Consulting LLC via Urban Land Institute, the consultants branded these suburban city centers "Surban" developments, which incorporate all aspects attached to New Urbanism.
The success of "suburban downtown" communities in areas like Reston Town Center and Tysons Corner in Northern Virginia have attracted investors' attention. According to Urban Land, these communities have a mix of office buildings, retailers within walkable distance, restaurants and transit offerings.
Big houses are out and short commutes are in. Thus, characteristics such as denser design are seeping into "Surban" developments. Robert Bowman, President of the Residential Neighborhood Development Council, is calling this model "The Great American Neighborhood." He commented to Curbed:
"We've seen a substantial shift in people who want the ability to walk to amenities in the suburbs. Cities have become the hotspots because people can engage in the areas where they live. Places that have a timeless appeal to them from an architectural and planning standpoint are in high demand."
Impact on CRE Sectors
Similar to Reston Town Center, these developments usually incorporate mixed-use projects (retail, office, residential, hotels), a "piazza" at the heart, designated area of green space and forms of entertainment, such as a movie theater.
Bowman predicts a large jump of office space to the suburbs in the next few years. Of course, this already exists in "Surban" developments. These office spaces are located near walkable commercial districts for that work-life balance. In the name of felxibility, office spaces in suburban centers are also starting to trend towards co-working atmospheres.
The massive presence of corporations in "Surban" developments creates a need for hotel space, too.
Today, Millennials value experiences over physical things, and retailers are following suit. Retail complexes in these "Surban" developments are focusing more on entertainment with a mix of boutique shops to provide a more personalized experience. "Old retail malls are becoming eyesores," notes Burns. "It's a perfect win-win to pull fown retail center and put in high-density housing and retail."
As for restaurants, there has been a surge in the number of cafes and niche-type places to eat. This has created more of a European-like style of living: laidback and community-oriented. Teens no longer look to spend time at the mall, but rather to people watch at nearby town centers.
Town Centers to Continue
The U.S. homeownership rate is expected to reach 60.8% in 2025, the lowest rate since the 1950s. Once Millennials get into family mode, there will be a huge movement to affordable suburban markets. Curbed notes that the Millennials' move to forming households will come en masse, along with Baby Boomers seeking out multi-generational neighborhoods.
I can only imagine that these city centers will grow in number over the next ten years. After all, they meet the needs brought on by New Urbanism, address affordability and align with shifting demographics.