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www.privateairny.com Private Air | Winter 2021/2022 49 D uring the pandemic, U.S. workers turned their homes into offices. Now, office buildings turned into homes could be a major real estate trend. Remote work emptied office buildings across the country. Commercial vacancy rates are higher than they've been in years. Developers are ready to convert vacant office buildings into homes and mixed-use developments. is brings American downtowns back to their historical roots. And it makes these neighborhoods more accessible for residents. Vacant office buildings during the pandemic e rise of remote work during the COVID-19 pandemic led to the emptying of office buildings. It changed the atmosphere and character of downtowns across the U.S. overnight. Downtown Seattle felt the effects of the pandemic first. "We were the first downtown to really feel the economic effects from the pandemic in North America," explains Jon Scholess, President and CEO of Downtown Seattle Association. "March 5 was the day that a number of major employers ordered their workforces to work from home. So, the effects were pretty immediate in a downtown with 350,000 jobs. And 75 percent of those can be performed remotely, so the sidewalks got quiet real fast." Some businesses had work-from-home procedures and policies already in place. Others scrambled to adjust. Few could have imagined that remote work would become the default mode for months. "COVID accelerated the trend of technology-based remote work," says David Downey, President and CEO of the International Downtown Association. "We all had access to Zoom and Teams and online collaborative software, but until we were forced to work from home, we didn't all learn how to use it. It was always part of the workforce future, but it was accelerated because of the necessity." Commercial vacancies increase As more workers stayed home, their former office buildings stood empty. e most recent Cushman & Wakefield MarketBeat report revealed that 17.2 percent of U.S. office buildings were empty during the second quarter of 2021. is is the highest vacancy rate since it peaked at 17.3 percent in the third quarter of 2010. Another 18 markets reported office building vacancy rates above 20 percent. at's up from 12 markets during the first three months of 2021. Every region of the country is affected, from Brooklyn and Philadelphia in the east to Los Angeles and San Francisco in the west. Houston, Chicago, Atlanta, Denver, Dallas, Cincinnati and Minneapolis also report high vacancy rates. By the end of 2020, 137 million square feet of office space was available for sublease, according to the CBRE Group. at's the largest number since 2003 — and an increase of 40 percent from 2019. Yet, commercial rents are still going up. Commercial rents increase "Despite rising vacancy, national asking rents continued to increase, up 0.9 percent quarter-over-quarter as landlords have been reticent to drop top-line rents and new construction has been coming online at higher-than- average prices," explained the Cushman & Wakefield MarketBeat report. at's bad news for business owners. But it's good for renters who want a unique place to live. at's because empty or overpriced office buildings can become new homes. Adaptive reuse transforms empty offices Taking an existing office building and turning it into a home is an example of adaptive reuse. Adaptive reuse means converting an existing building into a different form. It then serves a new function. e conversion of warehouse spaces in Manhattan in the 1960s kicked off the trend. But any type of building can transform in this way. With a little imagination, a hotel, school, church, factory or office building can be turned into a home. e structure can also become a mixed- use building. A mixed-use building combines residential, commercial and community spaces. at means renters can live, eat and shop under one roof. e benefits of converting office buildings into homes Location is a key driver towards the trend of converting office buildings into residential communities. "Adapting an existing building for a new purpose is immensely beneficial," says Heather Klejnot, community manager with ModelGroup, which has created mixed- used projects in several states. "First, location, location, location — and the potential of recreating density in areas that once were bustling with activity. Second, you have a gift (in most cases) of starting with stunning historical buildings with intricate details on the interiors and exteriors that become works of art in themselves when preserved. Existing buildings typically have the benefit of usable, existing infrastructure like the roads and city lights, as well. Not to mention the cost savings of not having to build what is already usable." Sustainable and good for the environment Adaptive reuse can be environmentally friendly and sustainable. It remodels structures that already exist instead of using resources to build a new home. Improvements often make apartments more environmentally friendly. at's important to renters who want to reduce their environmental impact. BUSINESS

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