Reviving Empty Spaces: CRE Building Conversions

Apr 9, 2024

In the wake of the COVID-19 pandemic, the landscape of commercial real estate (CRE) has dramatically shifted. Empty office and retail spaces have become a burden for investors, property owners, and communities alike. However, amidst these challenges, building conversions have emerged as a viable solution, offering benefits to both investors and residents.

Before 2020, traditional office buildings were bustling hubs of activity, filled with cubicles, communal kitchens, and water cooler conversations. However, with the rise of remote work and changing office dynamics, foot traffic in these spaces has significantly decreased. This shift has left many CRE investors and owners grappling with vacant properties, resulting in lost income and wasted space.

Office-to-residential conversions have gained traction as a strategy to repurpose underutilized office buildings. Cities that once relied heavily on the traditional 9-5 workforce are now exploring these conversions as a means to rejuvenate downtown areas. For instance, a 533,000 square foot office building in Manhattan, vacant since 2021, is being transformed into 588 apartments, revitalizing the local community. Similar initiatives are underway in cities like Boston, Pittsburgh, and Seattle, signaling a widespread trend in urban redevelopment.

Retail spaces, another sector hit hard by the pandemic, are also undergoing transformations. Former department stores, such as a Sears location in a Boston suburb, are being repurposed into life sciences labs, reflecting the evolving needs of the market. These conversions not only fill vacancies but also contribute to the diversification of commercial spaces, fostering innovation and economic growth.

The trend extends beyond office and retail conversions to include manufacturing-to-multiuse projects. A prime example is the Bottleworks District in downtown Indianapolis, once an abandoned Coca-Cola bottling plant. Through CRE conversion, this area has been revitalized into a vibrant mixed-use district featuring a variety of amenities such as retail outlets, dining establishments, office spaces, and entertainment venues. Such initiatives not only generate revenue for investors but also breathe new life into communities, fostering a sense of place and belonging.

At EBI, our CRE team specializes in guiding property owners through the process of building conversions and asset management. Whether you’re seeking to lease properties to new tenants or enhance their value for resale, our expertise can help you navigate regulatory compliance, energy efficiency, sustainability initiatives, and more.

Building conversions represent a strategic approach to address the challenges posed by vacant commercial spaces. By repurposing underutilized properties, investors can unlock new opportunities for revenue generation while contributing to the revitalization of communities. Contact EBI’s CRE team today to learn how we can assist you in transforming your properties for the better.

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