Work-from-home trend causes increase in vacant offices
- Work from home's popularity is leaving office spaces vacant
- NAR: Office space leases are still down nearly 60% from 2019
- Property owners look to convert unused office spaces into housing
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CHICAGO (NewsNation) — With many Americans now working from home, companies are choosing to close down offices in some of the largest metro areas in the country, leaving it up to landlords to get creative on how to utilize all of those empty buildings.
The pandemic influenced one of the most significant shifts in work culture, a shift from working in the office to working from home.
As more people work from home, companies have decided to drop their in-person office spaces. But that leaves building landlords in a pickle, looking for new ways to rent out the vacant spaces.
Office space leases are still down nearly 60% from the first quarter of 2019, according to the National Association of Realtors.
Boston was reportedly the only top-25 market in the country with fewer than 10% of its available space available to rent, according to real estate market analysis firm CommercialEdge.
Austin, Atlanta and Houston had the worst vacancy rates last month, with each seeing upward of 20% of its corporate real estate unused.
But even with some companies returning to the office, there are still so many vacant offices due to cost.
Data revealed that New York City, San Francisco, Miami and San Diego had the country’s highest average costs for office space leasing in February, with New York City leading the way at just over $76 per square foot.
Of those markets, San Diego was the only city with a vacancy rate under 15%.
But fewer tenants means less cash for landlords. Now, some building owners are getting creative with how they utilize their property.
Property owners are converting these unused office spaces into housing.
Silverstein Properties, one of the country’s top commercial landlords, announced plans late last year to convert spaces in several cities from coast to coast, including property in New York City and San Francisco.
Converting these unused office spaces into residential buildings might appear like a no-brainer, but it’s not as easy as it seems.
Every city has different zoning laws and requirements to navigate with many having affordable housing mandates that could complicate processes further.
NewsNation writer Devan Markham contributed to this report.
