The daily commute and weekly (if not more often!) shopping trip has been replaced by the simple act of turning on the computer or reaching for the mobile phone. In consequence, employers, building owners, and municipalities are realizing that the US has an excess of commercial building space. The question now, of course, is to determine how to fill this space:
- Some office complexes are being repurposed into warehouses (to house the increasing number of packages being shipped across the US) or apartments (to meet the need for residences, especially in urban and suburban areas).
- Smaller retail spaces (such as restaurants and convenience stores) are being converted into “dark stores,” or mini-warehouses that facilitate the rapid delivery of groceries and other staples in urban centers.
- Other developers are refurbishing office complexes by adding amenities (such as game rooms, nap rooms, and personal chefs) to entice both employers and employees back to the office.
The stakes are high for all involved:
- Municipalities are concerned about the loss of tax revenues from employees working from home – not only depriving them of payroll taxes, but also sales taxes from the various purchases employees make when in the city.
- Building owners must fill properties with tenants to remain profitable.
- Firms must navigate the challenge of wanting people back in the office while also realizing that many workers feel they are equally, if not more, productive at home.
- Construction firms concerned with a loss of business must reposition themselves from builders of new structures to specialists in remodeling existing properties.
For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly our series of studies in the Construction and Building Products catalog. Freedonia Custom Research is also available for questions requiring tailored market intelligence.