In my last blog, I likened emerging commercial real estate trends to a popular toy from the 1980s called Shrinky Dinks. Basically, this new report from RCLCO tells us that while businesses are beginning to hire new employers and retail sales are slowly increasing, the amount of space being utilized to accommodate this expansion is not growing at similar rates. Offices are allotting a smaller amount of square feet per employee, as are retailers. This reflects an emerging preference, particularly among Generation Y, that favors a greater integration of social interaction with both working and shopping. Closer quarters lead to more opportunities for networking, and interaction. So, if these trends continue to grow – what’s going to happen to all this extra commercial space we’ve accumulated over the years? How can strip malls, big boxes, and oversized office parks be retrofitted into something more reflective of current times? Turns out, commercial real estate developers have some advice for us. “Our approach is to look for good real estate that has the wrong real estate product and that’s often the case with 40-year-old malls,” Brett Hutchens, the president of Casto Lifestyle Properties, a developer out of Sarasota, Florida, told the New York Times back in 2011 – in the midst of the recession, no less. At the time the article was written, Hutchens was leading the redevelopment of an enclosed mall found in a Chicago suburb, demolishing most of the original center and replacing it with an open-air street of shops, diagonal parking in front of storefronts and outdoor public spaces for dining and socializing. Basically, they are turning it into a downtown Main Street. Other areas are recycling mall space in other ways. An Atlantic Cities article gives us several examples. In 2010, Columbus, Ohio, tore down the dead mall in its downtown for a park. Voorhees, New Jersey, demolished half of its dead mall, built a new main street and relocated its city hall into the remaining building. In Denver, eight of the area’s 13 regional malls now have plans for redevelopment. One of them, in suburban Lakewood, was converted from a 100-acre super block into 22 walkable blocks with retail and residences. The same can be achieved for office parks, as well. The Legacy Town Center in Plano, Texas was the first place in the country to create mixed-use infill by building a town center in an existing office park.
Bill De Santo, President of Englewood Construction, offers some practical ways for achieving retrofits without breaking the bank. He recommends letting the existing structure dictate the retrofit design. Says De Santo, “The best way to keep construction costs down is to keep as much of the physical structure as possible. Don’t work against the existing floor plans, but evolve them into the new design.” Are there any commercial spaces in your town that are currently underutilized or growing in their vacancy rates? How might they be repurposed into something more usable for your community? Remember, it was originally built there for a reason – chances are you have a workable location if retail once thrived there; it just has to be made into something more attractive and usable for today.