Too Much Vacant Commercial Real Estate? Here’s How to Fill It

To be blunt, the commercial real estate market is horrendous. Vacancy rates have hit multiyear highs, with 16.5% of offices, 10.3% of shopping centers, and 8.6% of enclosed malls empty, the Wall Street Journal reported this week here and here. And analysts think there’s worse to come. If unemployment continues to rise—and economists are unanimous that it will—so will vacancies.

One of the best parts about being a writer for BusinessWeek is that I can call up some of the smartest experts in the world and ask them questions about anything. So I decided to get in touch with some of the premier architectural and design firms to answer this: What could be done with vacant commercial real estate that would kick start a local or national economy?

I’ve collected their responses below, unedited…

HOK Hydroponics in Auto Plant? The recent tidal change in local auto production and sales has resulted in numerous idled and shuttered facilities throughout our communities. The open bay nature of auto plants and showrooms can provide the space for hydroponic and aquaponic greenhouse operations. Empty car lots can house composting and soil improvement operations for the facilities and surrounding communities. The approach would embrace the traditional sustainable and cyclic nature of farming, utilizing passive solar energy, natural light and geothermal heating/cooling, and recycling of water and nutrients through crops and animals and compost. On the community level, it would provide locally grown produce, fish and seedling plants; employment; and reuse and recycling of abandoned facilities. —Landscape Architect Rick Kacenski, HOK Planning Group, St. Louis Community (Kitchen) Garden: Every major city has numerous empty lots. Part of the reason is decay over the years in underserved communities and the collapse of the residential market in other areas. An informal chat with a Planner from Gwinnett County revealed that just within that county there were about 18,000 parcels subdivided and ready to be developed with housing when the market crashed. All these parcels are candidates for community kitchen gardens. Philadelphia has already implemented an urban kitchen garden policy and many other U.S. cities could benefit from one.

Greening the Freeway: Freeway interchanges can be transformed into self-sufficient, positive contributors to cities. There are a number of urban farming cooperatives in metro areas and small towns of America. Converting the un-usable green gaps of the interchange to usable farm land is a win-win for everyone. With a little motivation, a creative approach to land use and some entrepreneurial spirit in the community, an interchange farm can be up and running in close to no time. —Urban Designer Chirayu Bhatt, HOK Planning Group, Atlanta

1. Empty or unused space can be repurposed into a vertical urban garden unit. Stepped for sunlight and featuring a waterfall system. Creates green pockets for performances and activities. 2. Erect large urban/suburban wind harvesting super tower units that occupy minimal floor space but can cleanly alleviate a percentage of community energy consumption. 3. Repurpose empty lots and/or structures to be used as landing stations for a system of small urban commuter airships. Clean transportation and a notable city feature. —Graphic Designer Fernando Cordero, HOK New York Gensler Malls – Reeling the Community Inward: For malls in particular, community relations efforts need to be ramped up in order to maintain relationships and drive foot traffic (and ultimately to generate revenue). Consumers don’t necessarily come to a mall to shop (particularly now), but to socialize and feel a sense of community. For that reason, using empty mall space for more experiential companies or organizations is key; mall owners should look at working with their local farmer’s markets, cooking schools, grocery stores, public libraries, DMV’s and learning centers (such as Kaplan, Sylvan, etc) to establish outposts , extensions or temporary spaces. Not only does this create a sense of place and community, it truly becomes a one-stop-shop focal point for the public. Retail Stores – Creative Conversion: Free-standing retail stores need a more direct revenue-generating approach; they don’t often have the luxury of getting passer-by traffic so there needs to be a direct appeal to ensure a customer walks through the door. Retailers/developers need to look at highly creative ways to utilize all this empty space in order to bring in immediate earnings. Some ideas include using the space as a marketing tool or advertising canvas by renting the space out for window billboards for large corporations, “blitz” marketing venues, interactive showrooms or temporary pop-up shops for brands or companies that might otherwise be inaccessible (such as a mini car showroom or perhaps the pop-up space for a celebrity chef restaurant or food establishment not available in that city). Another idea is to use the space for cluster groups for upstart companies or themed vendors all renting out one space and creating a ‘brandless’ yet resonant space to shop. —Directors of Retail Strategy and Principals Lance Boge and Kathleen Jordan

Office as Community Think Tank: Create a general multi-purpose space that can be utilized by local non-profits and community groups, school groups, etc. for meetings, outreach programs or workshops. This fosters a wonderful sense of involvement for both the company and the group being served. Unused office furniture including desks and chairs, AV equipment, etc. can be used in the space to mitigate the need to purchase anything new. Configuration is flexible so the space can be utilized in a variety of ways for many different types of events.

Office as Hospitality Suite: Empty office space can be repurposed to bring a company closer to its partners. For example, for a firm that has vendors, partners, customers or alliances with companies in other cities or countries, repurposing empty space as hoteling suites and inviting these partners to use them as their “offices away from home” is a compelling, helpful way to create business value and goodwill. Especially in times of economic uncertainty, connecting with clients regularly, and in positive ways is a boon for companies.

Office as Venue: Utilizing empty office space for cultural programming such as art exhibitions is a great way to increase foot traffic and utilize not just empty floor space but empty wall space as well. Salon style lectures, gallery talks, presentations and panel discussions are just some of the attendant programming that could go along with cultural programming in the office environment.

Employee Health & Engagement: Turning our gaze inward for a moment, empty office space provides a unique opportunity to create locales specifically geared to support the needs of a company’s existing employees. For example, a large empty conference room could be turned into a daycare center or child play area for employees, one or several days a week. Quiet rooms for nursing mothers could be established, or a large area for yoga and meditation could be set up with inexpensive room dividers and yoga mats (the effects of both have been proven beneficial for lowering stress levels). Common areas in the kitchen or other spaces could be set up with more tables, chairs, couches to foster collaboration and socialization among employees. And a few extra coffee machines never hurt! —Director of Workplace Strategy and Principal Tom Vecchione

Perkins + Will There are very different kinds of retail, office, mall and residential buildings in the American landscape, so as we look for ways to re-use these buildings we may need to figure out which need to stay and which, really, need to go. It is entirely possible that by removing those that operate in an unsustainable way, we can spend our resources constructing the sustainable infrastructure that will allow for rebuilding to occur as makes sense; which has the added benefit of focusing re-occupation of these project types in buildings that are part of a larger sustainable, connected system. Sometimes it is better not to have someone take over the dead Wal-Mart, or the empty suburban office building, but to let them die.

Public housing has been decimated by the altruistic construction of mixed-income, mixed-use affordable housing projects throughout the country. Unfortunately these projects have, statistically, merely relocated the poor and working poor to inner ring, dying suburbs, with dying retail and little access to the necessary basic services that were centrally located in the original housing ‘projects’. Might it be possible to use dead malls for the basic services needed by these displaced citizens, and program the proximate houses, many in foreclosure, for true affordable housing, providing both access to basic needs as well as the seeds of a sense of belonging and ownership. —Senior Urban Designer and Associate Principal David Green

1. Reusing three existing hangar buildings on Pearl Harbor to create the Pacific Region Center for the National Oceanic and Atmospheric Administration (NOAA). 2. Transforming the former San Francisco Mint (shuttered since 1994) into a new Museum of History and a Visitor’s Center for the city of San Francisco. 3. We’re finalizing the contract to repurpose an old automotive plant in the Southeast U.S. into a new office/manufacturing facility. —Vice President and Media Relations Manager Mike Plotnick

FXFOWLE Architects To benefit our local or national economies, my suggestion of what could be done with our nation's empty office buildings, as well as many retail and commercial spaces, is to modify them for schools instead of spending money to construct new educational buildings. The demographics of the Echo Boom Generation are such that many towns and cities, which currently have growing school age populations, will begin to see them shrink just as they have built new school facilities. Spec office buildings are designed for transient users, and would be perfect permanent or temporary spaces for schools. —Senior Partner Guy Geier, FAIA, FIIDA, LEED

rmjm Take all the empty, big-box retail stores and turn them into local branches for community colleges. President Obama recently announced a plan to spend an unprecedented $12 billion over 10 years to improve community colleges, which will play a huge role in rebuilding the U.S. economy. Big-box stores are a perfect building block to expand access to community colleges and provide more classrooms as enrollments soar. These stores have good access to roads and parking, and the structures can be easily converted into very creative and flexible classroom space. It’s also a very sustainable approach to reuse an existing building instead of constructing a new one and you can make the building energy-efficient by bringing in ‘free’ daylight through skylights. The new ‘customers’ of the community college will also help surrounding retail survive by bring more traffic into those stores. —Principal Phil Dordai
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