30 December Combining and Refining CRE after Covid-19 December 30, 2020 By sma Commercial Real Estate News, Property Management building renovation, business tips, real estate trends 0 COMBINING AND REFINING CRE AFTER COVID-19 December 30, 2020 | CRE News, Management | building renovations, business tips, real estate trends Commercial real estate investment and development has been a tricky path to navigate, and that adversity has only been compounded by the Covid-19 pandemic. Stores on the brink of shutting down were left with no other choice after their customers couldn’t travel or transitioned fully to online shopping. Office spaces have become ghost towns as companies continue to social distance, with some moving to remote working permanently. With all of this empty commercial space, what does the future hold for property development? Decline in the Need for Space Over the years, retail and office spaces have continued to shrink their needed square footage. The average worker today requires almost half the space compared to workers 30 years ago. Remote working, advances in smart technology and adapting to consumer needs have all contributed to smaller team sizes. This trend has left many commercial renters overpaying for empty space, with no way to find a use for it. It also means that landlords aren’t getting the most out of their building and potentially leaving money on the table. Dividing up a property and seeing what combinations work best together provides a solution to both of these problems. The Recent Rise of Dual-Spaces Many commercial property owners have come to realize that traditional development doesn’t work anymore. One way owners are adapting to the changing landscape is taking different sectors and putting them together in a CRE sandwich. For example, the upscale shopping center Hollywood & Highland in California is converting unused event rooms into office space. Along with instituting more corporate spaces, Hollywood & Highland will also be re-working their layout and cosmetics to provide a more maneuverable and appealing experience. This has provided a blueprint for other mergers between offices and malls to fully utilize their buildings. Rebrand Don’t Rebuild Another pro with repurposing space is the money saved by not having to build from the ground up. While there may be some investment in designing and upgrading the building, the overall price is still low. In fact, the best spaces for this type of project are ones that have been stripped down to bare bones to provide a blank canvas of sorts. However, some buildings can be sold in their current condition and slightly tweaked to fit a similar purpose. Hotels to Hospice Retail providers and corporations aren’t the only ones looking towards repurposing commercial properties. Senior care facilities have been looking to purchase old hotels or apartment buildings for elderly tenants. Since some retirement communities are more secluded, these dwellings allow senior citizens the freedom to move around their neighborhood. They’re located closer to movie theaters, shopping centers and other points of interest. Larger buildings also help with facilities being overcrowded and having to put potential tenants on a waiting list. From Multi-Million Dollar Companies to Multi-Family Housing One more example of how versatile commercial real estate can be is the conversion of office space to apartments. This isn’t necessarily a new idea, but it definitely has gained popularity in recent months. Strained incomes have forced families to find more affordable housing options, increasing the demand for properties. Like with hotels being remodeled, switching offices to apartments doesn’t take much work and they’re often in prime locations. Although there may be some differences in architecture, new units can still look beautiful while remaining affordable. The Impact Down the Road Along with helping people in need, converting old commercial properties provides other benefits as well. Filling in the holes left by businesses shutting their doors can spark new life into the local economy. It can also keep more historic buildings from falling into disrepair and preserve the area’s history. Not only do these adaptive properties work for the economy, they can help the environment as well. New materials don’t need to be produced, which cuts down on your carbon footprint and land doesn’t need to be developed for new construction. The various benefits of dual-use properties has proven to be the answer for property owners. Have Your New Project Checked by NPI Old or new, nothing is more important than making sure that your building is safe for everyone in it. A commercial property inspection from NPI can identify problems before they get worse. Contact your local NPI inspector to schedule an inspection today. Comments are closed.