It’s hard to believe three years later we’re still experiencing the effects from the COVID-19 pandemic. And I’m not just talking about the latest variant and rise in cases. According to a Pew Research Center survey, about one-third (35%) of workers with jobs that can be done remotely are working from home full-time. Full disclosure, I am one of them. As a result, during the first three months of 2023, U.S. office vacancy topped 20% for the first time in decades, per JJL, a professional services firm that specializes in real estate and investment management.
And with many real estate leases signed pre-pandemic expiring now and over the next few years, experts expect to see a higher percentage of vacancies, lower rents or both. In fact, it is anticipated that by 2030, more than 300 million square feet of U.S. office spaces will be obsolete.
PM Engineer’s parent company, BNP Media, is one of many businesses playing a role in this national trend. With the majority of our workforce working remotely and the previous lease agreement up this year, BNP Media is downsizing from 39,000 square feet of office space to just 5,000 square feet.
With the increase in building vacancies as well as a national housing shortage, elected officials in cities across the U.S. are looking to convert underused commercial space into residential condos, apartments and other mixed-use developments. This is, of course, a great opportunity for MEP engineering firms because converting these buildings will take a lot of work.
“Residential infrastructure is quite different, however, from office infrastructure, and that is where the plumbing becomes crucial. Since office buildings typically have a centralized plumbing system and residential buildings have a distributed one, an entirely new plumbing system is likely needed in any conversion, depending on the layout of the building,” writes Daniel Colombini and Aristottle Labiaga in their feature article that ran in PM Engineer in June.
Plumbing is just one area to consider — bathrooms, kitchens and fire protection systems are all vastly different in office buildings compared to residential. All of these mechanical systems must be examined to determine whether or not a project is deemed viable.
There are a number of these projects that are ongoing in the city of Detroit in my home state of Michigan. One such project was completed just a few months ago in Detroit (in my home state of Michigan) — a $317 million redevelopment of the 38-story Book Tower, built in 1926, and attached 13-story Book Building, built in 1917. The property had been vacant since 2009, and was deteriorating until it was purchased in 2015. Today, it now boasts 229 high-end apartments and a 117-unit ROOST apartment hotel with the opportunity for up to three restaurants to open in the future.
There are many more planned developments of this nature in Detroit — in fact, the city ranked sixth on RentCafe’s list of top cities for future apartment conversions, with 2,327 expected units to be created. Other leading cities included Los Angeles; New York, Chicago, Philadephia and Cleveland, Ohio.
I anticipate we will see many projects like this arise in the coming years. And not just for multifamily residential developments either. There are many school and warehouse buildings that also sit vacant that could be turned into health care and agricultural developments. Either way, the change of use and redevelopment of any building will require updated plumbing and mechanical designs.
This trend will also impact the design of buildings going forward. MEP engineers will need to adjust to the declining demand for traditional office and retail space. Hybrid buildings, ones that could be easily modified to serve different uses, will become more advantageous for owners by protecting them from future shifts. The key to the future seems to be adaptability.