How can commercial properties stay relevant after the events of 2020? Here’s a look at how some owners can create repurposed industrial spaces.
To say that 2020 brought significant change is to put things mildly. The COVID pandemic brought about worldwide shutdowns and significant changes, many of which are permanent. As we recover, there will be no going back to our previous lifestyles. Our economic and social norms changed rapidly in a short span of time, and now consumer behavior is permanently altered. This means some industrial spaces such as shopping malls and cubicle farms have major overhauls in their future if they want to survive.
But what can an investor do with these buildings in a post-pandemic era? Before you order a wrecking ball and plan to start fresh, read on for some ideas for repurposed industrial spaces that can bring in money with less drastic change.
Shopping malls have been ailing for some time, and the pandemic only made their outlook worse. Experts predicted that a quarter of malls in the United States would close permanently within five years, and that was in the early stages of the pandemic. As the shutdowns raged on, many once recognizable brands closed their doors for good. Now that we’re facing a light at the end of the tunnel, retail spaces haven’t seen much of a comeback. You can thank persistent social distancing guidelines and a new reliance on e-commerce for that.
So what is an ailing shopping mall to do? Many property owners are looking to repurpose that empty space into distribution centers. The explosion of online shopping is both a blessing and a curse for them. As it accelerates the shopping mall’s decline, it provides a new opportunity for repurposed industrial spaces. But some experts warn this is not a cure-all for every barren retail space.
Offices aren’t a total loss, and not all remodeling efforts will be a complete overhaul of the property’s purpose. Some industries deemed “essential” during the pandemic, such as ed-tech, cybersecurity, and healthcare, will continue to grow. They will need expanded office space as they do. It doesn’t mean they won’t still go through changes.
Offices will still be essential, even as our way of thinking about office work changes. While previously the office was seen as a status symbol, workers find they miss the collaboration and interaction with their colleagues more than being locked away in a cubicle. Offices that persist will need to rethink their layouts to accommodate the new ways of working.
With flexibility from the work from home crowd in mind, offices may consider a desk reservation system in place of assigned cubicles. This would enable workers to accomplish individual tasks remotely and reserve office space for collaborative work.
People who used to “live at the office” may see some irony here.
With more people working from home, we may need more homes for people to work from. There’s one problem: housing prices are climbing higher than ever. More demand for homes and lower inventory means they likely won’t fall any time soon.
To accommodate this, some property owners are looking to convert their office spaces into new apartments. But don’t expect to live in a cubicle-sized shoebox. With the money that goes into converting office spaces to living spaces, many landlords of repurposed industrial spaces opt for the luxury route to recover those costs.
These conversions are common in heavy urban environments like Washington, DC, where office space is plentiful and housing space minimal. The conversions have been met with success. Some office buildings that were 100% vacant at the start are now at near-full capacity as luxury apartments.
With time, we could see the costs of these renovations go down and these newly repurposed apartments become more affordable.
With more people working from home, those who come to the office no longer need to be packed in. Social distancing can be built into the blueprint, and cubicles can give way to open workspaces. Owners of repurposed industrial buildings will also need to consider long-term modifications such as improved HVAC systems, single-stall washrooms, more elevators, and operable windows for better airflow. Some are taking “open workspaces” to a new level by bringing the office space outside. These will be costly modifications, but they provide long-term returns in the form of safer workplaces. They could even prepare workplaces for pandemics to come.
Some repurposed industrial spaces will have to account for how employees work in this new era. It should also account for employees balancing their work with life. Nobody wants to come out of hibernation for over a year only to be stuck in the same cubicle farm as before.
If you’re looking for repurposed industrial buildings, or ready to invest in new renovations yourself, ProspectNow is a powerful tool in your corner.
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