Can a memory "palace" be an outdoor route, like your commute?

Yes — any ordered path through familiar space works; a commute or walk is often called the "journey method".

The palace needn't be a building. A well-known journey — your walk to work, a running route, a drive — gives a long, naturally-ordered chain of loci (the bus stop, the bridge, the corner shop, the traffic light). This "journey method" is popular precisely because routes are long and linear, giving lots of ordered stations without cramming a single room.