Vacant commercial real estate properties have been a pain point for brokers and building owners even before the COVID-19 pandemic hit the United States. Empty spaces have become an even bigger issue for CRE owners following the pandemic, however. Many companies are still letting employees work remotely, and some plan to continue to do so even after the pandemic subsides. Meanwhile, a number of CRE spaces had to close permanently, leaving vacant properties around the globe.
The Forbes Real Estate Council recently shared their expertise on alternative ways that these vacant CRE spaces can be used going forward. Here are five of them.
Find ways to repurpose properties
Just because a property serves one purpose doesn’t mean it has to continue to do so. EZ Real Estate Founder and CEO Elisa Zhang recommended property owners explore potential repurposing ideas and research how possible they are.
“This means you can open your traditional office, hotel or retail market to a new set of clients such as apartment investors,” Zhang said.
Consider changing a property to self-storage
Self-storage businesses are constantly on the lookout for empty CRE warehouse space that they can convert, according to Kingdom Storage Holdings Founder Scott Meyers. He noted that his company has found success in acquiring such spaces with the potential to reposition a CRE building into multiple commercial spaces.
“These strategies have proven to be viable in this space,” Meyers said.
Consider mixed-use conversion
The current real estate landscape is an ideal spot for innovation, according to Susan Leger Ferraro, Founder and Chief Transformation Officer of Peace, Love, Happiness Real Estate. Ferraro’s firm is currently working with real estate companies that are looking to access government funds that are designated for increasing the affordable housing market.
“Many commercial properties are eligible for mixed-use or residential conversion to meet state goals for new housing,” Ferraro said. “Low interest rates and deferred capital gains are some of the great benefits available.”
Search for non-traditional tenants for backfill
Casandra Properties, Inc. has used social media and other research methods to locate non-traditional tenants to backfill CRE space, CEO James Prendamano said. For example, hospitals have been decentralized into local markets, micrologistic centers and shared office space to create a variety of new potential clients.
“Recent stimulus has also spurred growth, as folks trade in their 9-to-5 jobs to pursue entrepreneurship.,” Prendamano said.
Find ways to make CRE property more valuable
Sometimes an upgrade is the best way to make a building more attractive to potential tenants. Installing the latest technology is one way to entice tenants, according to City Commercia Real Estate, Inc. CEO Richard Lackey. CRE owners would be best served to eliminate any tech that employees would have to share.
“No one wants to share phones, handsets or common keyboards anymore,” Lackey said. “The likely solution is the use of personal mobile phones and laptops. Help lessors evaluate and equip spaces with the latest technology and then market the capability.”
Click here to see all of the Forbes Real Estate Council’s alternatives for vacant CRE buildings.
Joe Dyton can be reached at firstname.lastname@example.org.