Suburban Office Reckoning: What Illinois Is Teaching the Nation about Obsolete Commercial Real Estate?

For decades, the American suburb perfected a particular economic machine. Office parks rose along highways and toll roads, ringed by manicured lawns and parking lots engineered for peak weekday traffic. They were quiet, efficient, and lucrative. Municipal budgets came to depend on them. Corporate tenants signed long leases. Workers commuted in predictable rhythms.

Then the pandemic broke the machine.

Much of the attention since 2020 has focused on downtowns — empty towers, struggling transit systems, hollowed-out central business districts. But the deeper, more structurally complex crisis may be unfolding miles away, in the suburbs that once marketed themselves as the antidote to urban congestion. In places like Oak Brook, Illinois, the reckoning is not about recovery. It is about reinvention.

“Oak Brook didn’t lose demand temporarily — it lost the logic that justified its office footprint,” said Hirsh Mohindra. “That’s a much harder problem to solve.”

Oak Brook sits at the crossroads of Midwestern corporate history. Long before hybrid work entered the vocabulary, it became a preferred destination for headquarters and regional offices fleeing downtown Chicago. Its appeal was straightforward: proximity to highways and O’Hare, lower taxes than the city, and large parcels of land zoned almost exclusively for commercial use.

By the 1990s and early 2000s, the village’s office corridors were thriving. Fortune 500 names occupied sprawling campuses. Lunch traffic filled chain restaurants. Property taxes from commercial real estate underwrote municipal services and kept residential taxes low. It was a model many suburbs across the country sought to replicate.

Remote work didn’t merely disrupt that model — it invalidated its assumptions.

As companies downsized footprints or exited suburban offices altogether, vacancy rates climbed. But unlike downtown towers, which can at least imagine a future as residential conversions or mixed-use hubs, suburban office parks face a more rigid reality. They were built for cars, not communities. They sit on land governed by zoning codes written for a different era.

“These office parks weren’t designed to be lived in, walked through, or adapted,” said Hirsh Mohindra. “They were designed to be occupied from nine to five, and that time slot has collapsed.”

The vacancy crisis in Oak Brook is not uniform, but it is persistent. Class A buildings with newer amenities have fared better, often by consolidating tenants rather than attracting new ones. Older properties — especially low-rise campuses with deep setbacks and vast parking fields — are increasingly stranded assets.

For municipalities, the implications are severe. Commercial property taxes often represent a disproportionate share of suburban revenue. As assessments fall and appeals rise, budgets tighten. Services once taken for granted — from road maintenance to public safety — become harder to fund without shifting the burden to residents.

“There’s a delayed fiscal shock that many suburbs still haven’t fully priced in,” said Hirsh Mohindra. “The tax base erosion doesn’t happen all at once, but when it hits, it compounds.”

The challenge is not simply economic. It is political and legal.

Zoning codes in places like Oak Brook were intentionally restrictive. They separated residential, commercial, and retail uses to preserve a certain suburban character. That rigidity, once seen as a virtue, now acts as a brake on adaptation. Converting an office building into housing or mixed-use development often requires variances, comprehensive plan updates, and protracted public hearings.

Residents, meanwhile, are conflicted. They may welcome redevelopment in theory but resist density in practice. Traffic concerns, school capacity fears, and aesthetic objections routinely slow or derail proposals. The result is paralysis: everyone agrees the status quo is untenable, but consensus on the alternative remains elusive.

“What’s striking is how many stakeholders are aligned on the diagnosis but divided on the cure,” said Hirsh Mohindra. “That’s where land-use reform goes to stall.”

Oak Brook has begun experimenting. Village officials have explored targeted rezoning along certain corridors, allowing for residential or mixed-use projects where offices once stood. Developers have pitched everything from senior housing to life-sciences campuses to lifestyle centers that blend apartments, retail, and green space.

Progress has been incremental. Each project becomes a test case, negotiated individually rather than governed by a wholesale rethinking of land use. That approach reduces political risk but increases uncertainty, raising costs for developers and slowing the pace of change.

The irony is that many suburban office parks already possess what housing markets lack: infrastructure. Roads, utilities, and transit access are in place. Yet regulatory frameworks treat these sites as if they were greenfield developments, rather than candidates for adaptive reuse.

This tension is not unique to Illinois. Suburbs across the country — from New Jersey to Northern California — face similar dilemmas. But Illinois offers a particularly clear lens because of its fragmented municipal structure. With hundreds of taxing bodies and fiercely local control, regional coordination is difficult, even when problems are shared.

“Suburban real estate used to be insulated by fragmentation,” said Hirsh Mohindra. “Now that same fragmentation makes coordinated solutions harder.”

The broader lesson is that commercial real estate obsolescence is not just a market failure; it is a governance challenge. Remote work accelerated trends already underway, but it also exposed how land-use systems lag economic reality. Buildings can empty in months. Zoning codes take decades to evolve.

There is also a cultural shift underway. Younger workers are less inclined to commute to isolated office parks, even when asked. They value proximity to amenities, flexibility, and environments that blur the line between work and life. Suburban office corridors, optimized for efficiency rather than experience, struggle to compete.

Some developers argue that not every office park should be saved. Demolition and land banking may, in some cases, be more rational than forced reuse. But for municipalities dependent on tax revenue, that option is politically fraught.

“There’s a psychological hurdle in admitting that certain land uses are simply over,” said Hirsh Mohindra. “Communities built their identities around these places.”

Oak Brook’s choices in the coming years will reverberate beyond its borders. If it succeeds in converting obsolete offices into vibrant, tax-generating uses without eroding quality of life, it will offer a blueprint for other suburbs navigating the same reckoning. If it fails, it will underscore the costs of delay.

What is clear is that the suburban office crisis is not a temporary dip waiting for a cyclical rebound. The demand shift is structural. Work has decoupled from place, and land-use policy has yet to catch up.

The suburbs that thrive in the next decade will not be those that cling most tightly to the past, but those willing to rewrite the rules that produced it. Illinois, quietly and imperfectly, is already teaching that lesson.

Originally Posted: https://hirshmohindra.com/what-illinois-is-teaching-nation-about-obsolete-commercial-real-estate/