Apr 18, 2021

Commercial Real Estate Being Converted Into Other Uses

Covid has accelerated trends that were happening anyway.  More people are now working from home permanently, which causes the need for a fully outfitted home office; not just a desk someplace in the home.  This means that companies just don't need the office square footage they may have rented in the past.  This is causing a glut of office space on the market many times in desirable locations.  If not torn down completely, the high rise office buildings can be rezoned as residential and repurposed into a more urban environment with various types of shopping and restaurants on the first few floors and apartment or condo living up above.  

Some of these buildings could be 55 and older, while others cater to younger first time home buyers perhaps with young families.  I have been saying for years with the decline of retail stores that entire shopping malls could become like self contained cities.  The anchor stores could be either torn down, or converted into apartments and condos with the the connecting shopping areas used for all sorts of amenities.  These would be green walking cities with parking in the parking structures or underground. 

Our country is short 4 million housing units.  There is a demand for all sorts of housing.  Higher density can mean lower sale prices in some locations, which would be a good thing.  Walking cities would also mean less of a carbon foot print.  Walking to amenities would even be good for people by adding a little more exercise each day.  

And, then there are all the hotels.  With Zoom and other means to connect used for the last year, I suspect business travel will be greatly diminished.  Many of these hotels can be repurposed into senior living.  Hotel rooms can be combined to create one or two bedroom apartments with common dining and recreation areas.   Converting hotels is a no brainer.  

Commercial real estate will be converted into other uses in the next 5 - 10 years.  It is an exciting opportunity to create more affordable housing.