Commercial Space Must Take on New Meaning to Survive a Virtual Age
One of the many lingering impacts of the pandemic is the surplus of unused commercial space. From abandoned office spaces to malls with dwindling retail tenants, commercial property executives are experiencing lower demand in a world that is more virtual than ever before.
Due to these factors and with no change in sight, executives and developers are getting creative about uses for these non-utilized spaces. Based on emerging trends, open commercial spaces provide opportunities for repurposing to meet new needs and desires of consumers and the workforce. As industries across the globe make shifts to virtual, here are some ways that common commercial spaces can adapt.
Be Strategic with Your Corporate Spaces
As much of the workforce remains remote, the demand for large corporate office spaces continues to decline. While many executives see value in keeping a space for employees to gather and conduct meetings when needed, there is a general urge to reduce their footprint and, in turn, costs.
Some of the ways that large companies are downsizing include seeking smaller spaces and utilizing “hotel-style” personal stations for use by employees that need to come in for certain events. Additionally, companies are turning to shared spaces – whether it’s renting a small space themselves or renting out a portion of their existing space to another company. Another creative use of space is to incorporate community service, such as turning large eating or communal spaces into soup kitchens or allowing community organizations to utilize the space at little or no cost. Commercial executives looking to sell or rent unused spaces should consider this and the opportunity to install easy structures like dividers to maximize the potential of their open units.
However, on the contrary, some companies that have essential workers or are passionate about having their employees back in-office full time may be looking to expand their footprint to allow for safer distances to be maintained between employees or customers.
In the healthcare industry, for example, some hospitals are considering moving administrative workers from the hospital to separate, off-site office spaces to create space to add more beds or treatment areas. Construction executives should look to industries where more space may be advantageous and rethink the setup of their offered spaces to ensure they appeal to the right tenants or buyers.
Embrace the Future of Retail in a Virtual World
Now more than ever, consumers seek convenience, and online shopping offers that. Large retail centers like malls and plazas that in the past were frequently trafficked by buyers are seeing less and less in-person shoppers with the emergence of offerings like same-day delivery, curbside pick-up, quick-delivery online marketplaces and more.
Forward-looking developers are beginning to think about ways to adapt to this change in preference by seeking new purposes for these large developments. This includes considering redevelopment of malls and plazas into multi-use facilities, such as apartments, office space, indoor parks and restaurants.
While it may not be ideal for some, selling underutilized properties to thriving industry leaders seeking expansion opportunities is also a great way to safeguard financial stability. For example, Amazon is constantly opening more distribution centers across the U.S. and has already repurposed malls in different states to be used as warehouses for product storage.
As spaces take on new meaning, it’s critical for commercial and real estate executives to reimagine their unused spaces in order for them to remain profitable. By listening to the needs of their customers and being willing to embrace new trends in corporate and consumer behaviors, they can breathe new life into their properties and ensure a return from their commercial assets.
Nancy Cox is a partner at The Bonadio Group, specializing in financial statement auditing and consulting related to real estate and employee benefit plans. She serves as co-leader of both the employee benefit plan and real estate industry firm-wide teams. She is passionate about working with businesses and connecting individuals within the community to help them grow and achieve their goals.