What Hinders Office Space Conversions?

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A collision is looming, as a rising tide of conversions of office space into other uses for which there’s more demand meets a broad array of practical obstacles, chief among them local permitting and zoning regulations, the U.S. Chamber of Commerce says in The Future of the Office, a new survey of CRE professionals.

In fact, zoning and permitting comprise the top factors impeding the ability to convert office space, according to all three types of survey respondents: architects, builders, and owners and managers.

In a prepared statement, Neil Bradley, executive vice president & chief policy officer at the U.S. Chamber of Commerce, said cities that 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.

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Building layouts and floorplans are the other major category of barriers to office space conversions, the survey says.

The other side of the collision referred to above is the surging demand for office conversions.

Though only roughly one-quarter (24 percent) of owner/managers see converting office spaces into other commercial uses as a trend in the coming year, more than half (54 percent) of architects do, along with 35 percent of builders.

Indeed, the Chamber of Commerce survey says 71 percent of builders and 68 percent of architects are seeing more requests to convert office space versus just a year ago.

And 40 percent of respondents indicated that half or more of their U.S. properties/projects have included requests for converting existing office space.

Plenty of options

As to what all that office space will become, there’s no clear picture yet. The survey found that 30 percent of respondents anticipate conversions into retail space, 23 percent envision hotel/hospitality space, 22 percent favor multifamily property and 21 percent predict entertainment space.

Finally, the survey also tackled overall office space design trends, noting that spaces will likely become more open and collaborative, and more practical for co-working. Interestingly, a substantial 42 percent of industry professionals think that “designing workspaces so companies can rent out space or sublet will be an influential trend in the next year.”