Executive Summary

While cities have always been business and social hubs, they have undergone much evolution and oftentimes reinvention as economies advanced, technology progressed and society’s needs changed over time. American cities are much younger than those in many other parts of the world, yet would still be unrecognizable today by those who originally built them. The current evolution of American cities in response to the rise in remote working represents another waypoint in their journey.

CBRE has analyzed the real estate implications of American cities’ current evolution to help inform business and public policy choices. The study offers insights, recommendations and a case study about shaping the future of cities. We have designed a mapping tool that identifies clusters of urban characteristics across mixed-use, business and residential districts and their effect on real estate market fundamentals. This in turn offers insights about how cities can reinvent themselves.

  • The characteristics of American cities, and the greater markets in which they reside, vary greatly. We categorized 19 markets into four archetypes* based on economic, demographic and urban development factors:
    *The methodology appendix contains details on the criteria used to determine these groupings.
    • Super Cities: Los Angeles, New York
    • Mixed Majors: Boston, Chicago, Philadelphia, San Francisco, Seattle, Washington, D.C.
    • Sprawling Darlings: Atlanta, Dallas, Denver, Houston, Phoenix
    • Developing Destinations: Austin, Charlotte, Miami, Nashville, Orlando, Tampa
  • Suburban growth that dominated the last half of the 20th century gave way to an urban renaissance beginning in the 1990s and accelerating in the 21st century. Many baby boomers and millennials moved into urban neighborhoods in search of a walkable live-work-play environment.
  • Office-using job growth contributed to the 21st-century urban renaissance and became ever more concentrated in CBDs, leading to a boom in office and residential construction. The downside was congestion and increased commute times for suburbanites, often compounded by a lack of modern infrastructure.
  • Disruption by the COVID pandemic in the early 2020s brought 30 years of urban renaissance to a halt. Many city dwellers moved to the suburbs, and domestic in-migration was fastest in the suburban areas of the Sprawling Darlings and Developing Destinations. Density became a public health concern and remote work a necessity for many office-using jobs, driving out-migration that continues today as millennials age and buy homes.
  • Commercial real estate has been particularly affected by these demographic shifts and new working patterns. Public safety concerns also have made workers and visitors more reluctant to return to cities, especially in the Mixed Majors. The office sector has had an unprecedented rise in vacancy that is unlikely to return to pre-pandemic levels. Higher interest rates, also a legacy of the pandemic, have exacerbated the crisis.
  • Future success of cities – and the role they play in their greater markets – is not guaranteed. Clearly identifying their strengths and weaknesses is required to inspire reinvention, successfully retrofit their urban cores and maintain their economic power and competitive advantage. The ultimate goal is to attract more residents, visitors, businesses and development that will drive urban vibrancy and tax revenue.
  • Much of this reinvention will come through conversions or demolition of older, underutilized real estate. In most cities, the amount of conversion activity underway is not yet enough to be fully transformative, but data shows that targeted conversion activity can be a catalyst for broader change.
  • We identified six keys that help cities to thrive: economic dynamism, demographic potential, lifestyle vibrancy, distinctive identity, responsive governance and resilient infrastructure. Each of these presents an opportunity to drive change.
  • Public and private stakeholders have an integral role to play in shaping American cities. By having an all-hands-on-deck approach, the collective impact of experiences and rich data will drive insights and strategies to transform our cities.

Figure 1: Population Change in Top 30 Markets – 1970-2020

Figure 1: Population Change in Top 30 Markets – 1970-2020

Source: CBRE, U.S. Census Bureau, LinkedIn Talent Insights, 2024.
Note: Market geographies are based on commute zone boundaries from Meta’s Data for Good initiative (see methodology for more information).
Source: CBRE, U.S. Census Bureau, LinkedIn Talent Insights, 2024.
Note: Market geographies are based on commute zone boundaries from Meta’s Data for Good initiative (see methodology for more information).

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Case Study Author

  • Larisa Ortiz

    Managing Director of Public Non-profit Solutions at Streetsense

    Photo of Larisa Ortiz