Two decades after many millennials started moving downtown to be near their jobs, developers mastered what was needed to entice new urban dwellers: a good location, transit, retail, and swank multifamily buildings with amenities. Over time, all the development led to congestion and fewer affordable, close-in buildable sites. Apartment and condominium buildings became expensive for many. Developers and millennials alike asked the next question: Where now?
The answer was to look at suburban sites that were still available and affordable. And although many millennials avoided migrating to the suburbs as many of their parents had, they began to view the trek as palatable, if enough stars aligned: more square footage, outdoor space, walkable neighborhoods, good schools (for those who had children), and the same amenities once only available in cities and smaller metropolitan areas, says Mary Cook, a commercial interior designer and founder of Chicago-based Mary Cook Associates. If their friends were willing to move, all the better. “Few want to move to the suburbs alone,” she says.
Though the emerging suburban hubs may never have the plethora of attractions that urban downtowns do, many have enough “pockets of urbanity” to make a dynamic, live/work/play life possible, says architect Joshua Zinder, of Princeton, N.J.–based firm JZA+D.
“They’re never going to resemble Los Angeles or other cities that big, but they can be pedestrian-friendly environments with enough going on,” says Jose Sanchez, DLR Group’s design lead focused on retail and mixed-use, who works in the firm’s Los Angeles office.
The phenomenon of a suburban locale with urban vibe earned the moniker “surban” from Irvine, Calif.–based John Burns Real Estate Consulting. As these sub-hubs multiply across the country, what’s clear is that no single prototype will work since suburbs vary from tiny communities with a single stoplight to large ones considered small cities. Yet, the locations most likely to thrive share the common denominator of being hybrids that borrow some parts from their lively urban counterparts and retain their bucolic and other suburban advantages.
To achieve this mix, developers are wise to heed the following seven lessons.
1. Determine your demographic. Suburban multifamily dwellings attract residents for varied reasons. Most millennials want costs lower than in comparable urban buildings. “When they move, it’s typically because they were pushed out of where they like to live,” says Todd Zimmerman, a partner at Zimmerman/Volk Associates, a market analysis firm for urban and new urban communities in Clinton, N.J. But suburbs can be vastly different, so research and planning are needed to know who might find each appealing, along with which multifamily building.
For example, Tony Rossi, president of Chicago-based M&R Development and chairman of RMK Management, felt his firm’s luxury apartment product would appeal to a new generation of renters-by-choice moving to affluent suburbs. “We’re experiencing a wave of empty-nesters who sold their homes and wanted to downsize in style, yet remain in their suburb,” he says. “There’s also more traction among maturing millennials decamping from urban centers to try out suburbs with good schools before they commit to raising a family. They’ve been living in class A apartments downtown and expect the same level of amenities, finishes, and service in a suburban rental, but with lower rents,” he says. The firm found the right type of site in the older, tony North Shore suburb of Wilmette along Lake Michigan. The five-story The Residences of Wilmette building it constructed became the area’s first new multifamily dwelling in more than a decade when it opened in 2017.
M&R gave the brick and stone building a modern profile, a look many apartment renters now seek. The 75 high-end apartments have condominium-quality finishes and family-size units (up to three bedrooms, though there are studios for the fast-growing single-household rental market). The building also includes 116 parking spaces—1.54 per unit—landscaped terraces and an indoor fitness center and spa. It’s 93% occupied, and a two-bedroom, two-bathroom unit goes for $3,400, versus $3,500 to $3,800 for a comparable downtown building, Rossi says.
Though CA Residential, the residential development arm of Chicago-based CA Ventures, often designs luxury downtown properties, it’s now also looking for suburban pockets with a higher-than-average concentration of “gray-collar” renters whose household income and education levels and population growth exceed national norms, says Bob Flannery, president. The company designs these apartments in affordable location with larger floor plans; market-appropriate finishes, services, and amenities; and costs lower than similar higher-end suburban properties and urban developments. Projects in Lacey, Wash., Thornton, Colo., and Vallejo, Calif., are in its 2019 pipeline.
The one cohort that may be less interested in the surban model are families with children. “They still gravitate to single-family homes because they’re interested in family-friendly activities,” says Steve Burch, senior vice president, consulting, in the Phoenix office at John Burns Real Estate.