COVID-19 continues to have a lasting impact on businesses, changing how commercial spaces are utilized. Between the ongoing need for social distancing, the upsurge in remote work that appears to be here to stay, and the resulting changes in sensibilities and expectations for workplace and retail environments, the trajectory of the commercial property market has appreciably changed post pandemic – posing challenges for many businesses.
Maintaining building occupancy has become a growing concern, leaving some properties vacant and some requiring repurposing. Terry Coyne, vice chairman of Newmark; Kevin Moss, vice president of advisory and transaction services – retail of CBRE, and Darrell Young, CEO of Darrell A. Young Enterprises, talked about trends in repurposing office and retail commercial space for post-COVID use.
The pandemic forced many businesses to switch to remote operations or to reduce their workforces. Even as businesses have reopened their workplaces, whether via full-time or hybrid models, a substantial number of employees have chosen to remain remote, leaving office spaces significantly less occupied.
“Our experience is that the office market sector remains uncertain as companies sort out their operating costs, staff retention and availability, as well as profitability,” Young said.
Various property changes and incentives have become necessary to encourage employees to return if the employer deems that to be the route that makes the most sense for that business model.
“The home has become a competitor to the office,” Coyne said. “The office must become a competitor to the home.”
These property changes have included adjusting office layouts to promote social distancing and improved privacy, upgrading HVAC systems to ensure fresh indoor air and providing improved technology to better communicate with remote workers.
“We have added state-of-the-art-gyms, restaurants and green spaces,” Coyne said. “We have seen office spaces remove large walls and big garage doors to make the environment airier and more open in keeping with the new aesthetic.”
Further workplace incentives have included on-site childcare, cafeteria improvements and outdoor activity offerings. Some businesses have repurposed their spaces or added new amenities to accommodate updated workplace norms and foster hybrid environments. As such, businesses of varying sectors have a lot to consider when it comes to keeping their buildings operational in this evolving landscape.
“This is the way of the future,” Coyne said. “These types of modifications are here to stay. The biggest hurdle businesses face in incentivizing commercial space is money, but these are some of the trends we will continue to see.”
When repurposing plans do not include creating office upgrades that may be viewed as unattainable or unnecessary luxuries, commercial space employers have repurposed in other ways.
“Our larger users have decreased the density of staff allowing for re-opening of their facilities,” Young said. “The density decrease has allowed for the implementation of staff rotation so the complete staff has access to the offices, but on an alternating schedule.”
Post-pandemic times have caused everyone to get creative. Even those who cannot renovate, enhance, or rotate have repurposed in some way.
“Our smaller users have started to return to their offices in full force, largely out of necessity,” Young said. “But they have installed protective partitions to provide added protection to their staff.”
Protective partitions are repurposing tools used in retail and food service as well. Many retailers and restaurants have redesigned spaces to be visually less cluttered with clear partitions.
“Small businesses are embracing open spaces and airiness, attributable to a post covid sensibility and cleaning protocols,” Coyne said.
“COVID has disrupted how retailers and restaurants operate and design their spaces on a go-forward basis,” Moss said. “Restaurants, both fast casual and casual dining alike, have adapted mobile online ordering which required adapting both the interior and exterior parking lot to implement the new business model. The demand for pickup windows is at an all-time high, but if a space cannot accommodate a pickup window or drive-thru, dedicated parking is highly sought after by both retail and restaurant tenants.”
Curbside pickup and other car-based, parking lot applications are also part of the common repurposing considerations for commercial space.
Lisa Matkowsky is a freelance writer.