To Transform the Nation’s Downtowns, We Need the Public Sector
Originally published on April 29, 2024, by Jay Biggins for NAIOP.
In the wake of the coronavirus pandemic, many downtowns across the country remain disquietingly vacant. Office towers that once hummed with activity are a bit quieter, the hallways emptier. The U.S. has the highest office vacancy rates – 18.4% – since 1992. Some levels of hybrid and remote work are here to stay, and now the commercial real estate landscape faces some tough decisions, offering both challenges, which are clear, and unique opportunities, which are less well-defined but coming into focus.
Where companies used to require space for virtually all their workers, hybrid work models mean fewer people in the office and, thus, less need for so much square footage. Now, all across the nation’s downtown areas, developers and owners are asking what the future of the “office” looks like. How do we utilize the space that’s available?
The biggest obstacles confront Class B and C office buildings, often in less desirable locations, lacking amenities and/or technology. These properties have the emptiest space, and many have no viable future as office space.