In this article from Work Design Magazine, Rob Zirkle explores how commercial real estate trends—driven by a post-pandemic reset—are opening opportunities for mixed-use developments.
2023 brought about substantial shifts in the commercial real estate industry due to continued disruption across America’s urban ecosystems. As a post-pandemic valuation reset continues to sweep the country, single-use zoning districts are disappearing, and financial districts are becoming a thing of the past to make way for new concepts that revitalize their respective city cores. In some cities, we saw offices and other commercial spaces throughout central business districts (CBDs) trading for as low as 30 cents on the dollar when compared to pre-pandemic values. As a result, optimistic developers now have the opportunity to create energizing new environments for cities with the possibility for significant ROI.
We’d be remiss to not consider the rise of new technologies and their role in the redefinition of cities throughout 2023. Over the last year, innovative new industries started to build their footprints while other companies prioritized remote work. For example, in San Francisco, OpenAI took over Uber’s 445,000-square-foot Mission Bay HQ building—indicative of evolving trends. Uniquely, this platform requires ample physical space for in-office employees to achieve their fully online offerings.
As a result of these trends and more, we’re anticipating that in 2024 we will see increased dominance of the mixed-use building type with strategic build-outs and programming in an effort to support the continued revitalization of the nation’s CBDs. Developers who buy at a value reset basis and provide the right balance of mixed uses for a community—from living and working spaces to engaging public amenities—will surely capitalize on this shift. In order to successfully do so, designers must have a seat at the table to maximize strategic potential and user experience.
To read the full article, visit Work Design Magazine.
About the Author
Rob Zirkle, AIA, LEED AP, is a Principal and Practice Group Leader in our Oakland office.