CBD is a common abbreviation for central business district. This part of a city is also commonly known as downtown, or the city center. Central business districts are characterized by high-density development of office buildings, often including government centers and transportation hubs. The "CBD office market" is the term for demand for office real estate in a central business district. In most cities, the central business district represents an important part of the local commercial real estate market.
Office space is the mainstay of central business districts, though they may also have tourist attractions, such as museums, sports and entertainment complexes. The real estate market is likely to include businesses that appeal to travelers, such as hotels, retail shops and restaurants.
During decades when suburban development was booming, demand declined in central business district markets. In many cities, corporate headquarters relocated from the CBD; over time, smaller companies began to follow them. Shoppers were more likely to head to a suburban mall than downtown shops or department stores.
In recent years, many cities have seen gentrification of central business districts. Commercial real estate markets are being revitalized as adaptive reuse converts older commercial buildings into residential lofts, galleries and upscale shops. These developments help drive the market for office space rental. Old banks, offices and department stores are remodeled for use by modern service and high-tech businesses.