Because of the disruption caused by COVID-19, paired with the rise of working from home (WFH), many commercial real-estate spaces across the nation remain empty, even almost three years after the start of the pandemic. And, while countless office spaces have started to welcome back workers in the past year or so, given the rise of hybrid work and the new way of balancing work and personal life, the occupancy rates in said offices still haven’t bounced back, which is undoubtedly a rising concern for property managers and owners.
Leases in the commercial real-estate sector are oftentimes longer than in other areas, such as residential—typically ranging between three and five years but can easily go up to 10 years for an office space. That being said, the question arises: What remains to be done with those impressive but deserted office buildings and the countless rows of desks that are doing nothing more than gathering dust?
For some, the answer comes in the form of adaptive reuse. With leases expiring, or about to expire, some developers are looking to turn unused office spaces into affordable housing or other residential uses to meet the demand in their area. However, for many others, transforming an office building into something that stands at the complete opposite pole, like an apartment building, comes with skyrocketing expenses, especially considering the current economic struggles and rising inflation. In this case, retrofitting comes as a great middle-ground for both owners and property managers, who could still tend to a business environment, only slightly more adjusted to meet today’s work patterns.
Coworking spaces are exploding across the nation, with more and more remote workers and freelancers looking for flexible workspaces to conduct their day-to-day business and network with other professionals from different backgrounds. In fact, as data provided by CoworkingCafe shows, the number of freelancers in the U.S. has grown significantly in the last years, with more than 6 million of them operating across the nation in 2021.
Despite their growing numbers, however, the coworking spaces currently available are failing to meet the demand from this demographic alone, not to mention from remote workers who are looking for a flexible and convenient space to work from outside their homes. In fact, the majority of the large U.S. cities that witnessed an increase in freelancers are underserved in this segment, having only one, two or three coworking spaces available per 1,000 self-employed workers. This is all the more reason to consider retrofitting unused offices space into coworking spaces as a solution to the empty offices problem; the outcome would not only meet a rising demand that is not yet addressed in this market, but it would also be significantly more cost-effective than adaptive reuse.
At the same time, turning a traditional office space into a coworking area would require minimal changes in terms of floor plans, office distributions and other organizational features, which ensures that such a project could be completed in a relatively short amount of time, at least when compared to other repurposing alternatives.