As more offices convert to a remote-work system, buildings in business districts sit empty, but some building owners and architectural firms are coming up with creative ways to repurpose these empty spaces.
Key Details
- Over the next seven years, 330 million square feet of unused office space could exist, directly tied to the growing trend of remote work, according to a report from real estate firm Cushman & Wakefield.
- Around 80% of available office spaces are currently leased to a tenant. The amount of space actually being used is closer to 50%, says architectural services company Ashford Inc.
- Printing company Cimpress reworked its office spaces in 2021 to focus more on collaborative spaces rather than individual office spaces. Similarly, software company Atlassian revamped its office space to create more common areas, add phone booths for private calls, and include “focus” pods.
- In early 2020, Amazon repurposed several floors of its downtown Seattle headquarters as a permanent homeless shelter. The shelter takes up eight floors and includes an industrial kitchen, recreational spaces, and room for Amazon’s legal team to support residents.
- One of the most popular ways to repurpose old office buildings is to convert them into residential living spaces or mixed-use buildings.
Why it’s news
Typically, office leases are five to 10 years long. Businesses still under lengthy lease agreements, who have lost occupants to remote work, must find a way to use the space they have already paid for.
Some startups are taking advantage of this opportunity. Silofit founder Wilfred Valenta’s company takes small, unused office spaces and converts them into “micro-gyms.” Customers can rent these spaces by the hour. This model benefits personal trainers teaching private classes or gym-goers who want to work out alone.
Other startups have turned empty offices into food distribution centers, classrooms for remote learning, coworking spaces, and storage space, Crunchbase reports.
Repurposing office spaces into storage facilities is a popular option for startups. Individuals or businesses can rent out unused spaces on Neighbor. The business model is similar to Airbnb. Customers rent out a privately owned space to store their belongings.
Perhaps one of the greatest needs empty office buildings can fill is adding more affordable residential spaces. Though converting former business spaces into residential living can be complicated by regulatory red tape, the demand for affordable living is high.
According to Ashford, “Done right, an office conversion is both faster and significantly more cost-effective than the teardown and rebuild process; with the added benefit of preserving the historic buildings that make iconic skylines.”
Reusing existing office space is also appealing to city planners who are increasingly looking to 15-minute cities as the best path forward for city planning. Empty office buildings are already in downtown areas near businesses and workplaces, making them excellent candidates for residential space.
Ashford is already working toward a project in its home state of Texas that will redevelop areas of Dallas, Fort Worth, Houston, Austin, and San Antonio into more walkable cities. The architectural firm is building a $100 million fund to invest into this project.
As landlords struggle to find businesses looking to lease office spaces, more will turn to profitable options such as turning their existing buildings into living spaces.