WASHINGTON, D.C. – Architects, builders and industry professionals say permitting/zoning regulations and building layouts are impacting their ability to convert current office spaces into other uses, according to The Future of the Office survey released today from the U.S. Chamber of Commerce.
As urban areas look at how to revitalize downtowns for a post-pandemic world, there is a lot of interest in converting excess office space to other uses. As the survey reveals, some of the barriers are physical—like layouts and floor plan configurations—but some are in the control of local governments, especially zoning/permitting and environmental regulations.
Almost half of respondents (46%) indicate zoning/permitting rules are a barrier. The delays are happening as architects and builders are receiving a growing number of requests to convert office space. Seven in ten builders (71%) and two in three architects (68%) are receiving more frequent requests to convert existing office space to a different use compared to one year ago.
“As our exclusive survey reveals, cities who want to adapt and thrive will look to reform their zoning, permitting, and environmental reviews to make it easier to convert what would otherwise be vacant office space to retail, hospitality, entertainment space, or housing,” said Neil Bradley, Executive Vice President and Chief Policy Officer at the U.S. Chamber of Commerce.
The study, conducted in late 2022, surveyed commercial real estate industry professionals on trends in office space conversion, design, and usage. Two in five respondents (40%) indicated that 50% or more of their U.S. properties/projects have included requests for converting existing office space.
Working with existing layouts and government regulations are the top two barriers in office space conversions. Almost half of respondents indicated building layouts are impacting conversions (47%) followed by zoning/permitting (46%), environmental regulations (44%), and floor plan configurations (42%).
Additionally, architects (54%) are more likely than builders (35%) or owner/managers (24%) to say that converting office spaces into other commercial uses will be a trend in the coming year. Real estate professionals are more skeptical that conversion from commercial to residential space will be a big trend.
There is a near equal distribution of the types of properties in which existing office space will be converted to in the future. Industry professionals anticipate 30% of existing office space will become retail space, 23% will become hotel/hospitality space, 22% will become multifamily property and 21% will be entertainment space.
Office Space Design Trends
The survey found that safety, collaboration, co-working, and flexibility are the leading trends in office space design.
A majority of commercial real estate professionals believe that spaces that are more open and collaborative (52%) and spaces which allow for co-working (52%) will be the most influential trends in office design over the next year. Nearly half of industry professionals (42%) believe designing workspaces so companies can rent out space or sublet will be an influential trend in the next year.