Will subdomains with duplicate content hurt my SEO? (solutions to ranking in different areas)

[SearchParty]

My client has offices in various areas of the US, and we are working to have each location/area rank well in their specific geographical location.

For example, the client has offices in Chicago, Atlanta, Dallas & St Louis.

Would it be best to:

1. Set up the site structure to have an individual page devoted to each location/area so there's unique content relevant to that particular office? This keeps everything under the same, universal domain & would allow us to tailor the content & all SEO components towards Chicago (or other location).

( example.com/chicago-office/  ; example.com/atlanta-office/  ; example.com/dallas-office/ ; etc. )

2. Set up subdomains for each location/area...using the basically the same content (due to same service, just different location)? But not sure if search engines consider this duplicate content from the same user...thus penalizing us. Furthermore, even if the subdomains are considered different users...what do search engines think of the duplicate content?

( chicago.example.com  ; atlanta.example.com  ; dallas.example.com ; etc. )

3) Set up subdomains for each location/area...and draft unique content on each subdomain so search engines don't penalize the subdomains' pages for duplicate content?

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Does separating the site into subdomains dilute the overall site's quality score?

Can anyone provide any thoughts on this subject?

Are there any other solutions anyone would suggest?

[Highland]

First off, chicago.yoursite.com is going to be seen differently from atlanta.yoursite.com, unless they are substantially similar (i.e. they are carbon copies). Remember that this means that each subdomain will have its own SEO. yoursite.com/chicago is going to be viewed as the same site as yoursite.com/atlanta because they share the same TLD.

Unless you're going to build a ton of content around each, I would suggest one site with a subdirectory. It's less work for you. Then make each localized page unique. Take pictures, discuss the features of each location, etc. Add the address and maybe a map widget.

[WilliamKammer]

Subdomains are seen as completely different websites. This means you would be diluting your authority. Using duplicate content on these subdomains would also definitely be an issue.

You're best bet would be to have different pages for each location, and make sure each of those page have unique content. This way it's all on the same website, fresh content on each page, and you still accomplish what you were looking to.

You could also go one step further and link each of the location pages to individual G+ pages and take advantage there as well.