The COVID-19 pandemic fundamentally changed the way people work. While many employees have now returned to the office, numerous workers continue to do their jobs from home. The result is an unprecedented number of empty and partially empty office buildings in the downtowns of cities of all sizes. This sudden wave of vacancies presents unique challenges to those who own and rent these office buildings, but it also provides an investment opportunity for people who are willing to think in new ways. Receiving a commercial appraisal of the office building is an important first step that allows you to see what you’re working with and what challenges you will face moving forward.
Repurposing Real Estate
The good news, when it comes to repurposing real estate, is that a high percentage of urban office buildings are in very desirable locations. This means that however you decide to repurpose your building, there should be a good market of interested tenants. Among the uses many building owners are putting vacant office spaces to are residential units, retail businesses, restaurants and bars, warehouses, and storage space. The glut of empty space provides an especially good opportunity to address housing shortages by building affordable units.
Because commercial real estate leases tend to be long, it can be some time before vacancy numbers rise to the level where large scale repurposing becomes possible. Nonetheless, there are many things that can be done in the short term. Some businesses have started giving out subsidized retail space at the street level to spur interest and implementing other innovative solutions. There is no need to wait for 100 percent vacancy to get started repurposing your near empty office buildings.
The Challenges of Adaptive Reuse
Adaptive reuse, while a great investment opportunity, is not without its challenges. These vary depending on the type of use you’re putting your units to, but infrastructure questions, such as plumbing, heating, and cooling, are common to nearly any conversion. There are also important tax concerns to consider, particularly if you are converting commercial real estate to residential, as the tax rate can be quite different.
Whatever use you decide to put your building to, the high number of vacancies creates an exciting new investment opportunity and a chance to think in innovative terms. Before you decide to invest in a building, though, it’s essential that you get a commercial appraisal. In a commercial appraisal, an objective third-party professional will give you a fair estimate of the property’s value and can give you a heads-up on any infrastructure challenges you may face. Whether you’re a property owner who’s looking to put your building to new uses or a prospective buyer, a commercial appraisal is an important first step in the process of repurposing real estate.