Vacant Office Space Alternatives

Dan Shapiro • Aug 17, 2023

Commercial Real Estate Conversion Options

High-rise office buildings once filled with employees now sit empty at nearly 19%, 5% higher than before the pandemic. Half of the biggest global companies indicate they will need less real estate within the next three years. According to the US Chamber of Commerce, approximately 60% of companies are operating within a model by which some employees work remotely and other are in the office. 20% are adopting a fully remote work option, and the other 20% of companies requiring in-office attendance full-time So, with many of these companies offering such options to their employees, what are the landlords doing with these vacant office spaces.

The results are varied if not creative as brokers and owners try to fill up office spaces once fully occupied by workers, staff, and employees. For example, empty offices in Washington DC have been turned into residential housing which has helped the growing need in the housing market, but this is still utilizing less than 1% of the empty office spaces in the area. Arlington, Virginia's vacancy rate sits at 22%, promoting revisions of city zoning to accommodate more uses for these vacant buildings. Other places like New Jersey and even some communities in the Chicagoland area are utilizing old strip malls to open indoor facilities, like pickle ball.

Agricultural use is another option for commercial real estate conversion options for vacant office space. Office spaces already deliver an ideal environment for growing food, since they are already air conditioned, heated and well ventilated. Not many modifications have to be made to the buildings themselves. Turning offices into vertical farms, especially in urban agriculture venues, which allows edible plants to be grown inside rather than in fields, is another alternative for commercial real estate landlords.

Neighbor Storage, a Salt Lake City-based business, has found new business as commercial real estate owners search for other uses for their vacant office space. Neighbor Storage, which normally assists individuals in finding self-storage options, has uncovered a market for storage in extra commercial real estate spaces, such as offices. They have grown from helping people rent out their unused garage space to working with commercial real estate landlords looking to leverage their empty office floors.

SL Green Realty Corporation, a large commercial landlord in New York is working with Backlot, a company that connects landlords with film and television companies to utilize these vacant buildings. The use of Backlot has helped it earn 3 million dollars from both film and television shoots and generate an alternate revenue stream from these vacant buildings.

Industrial developers often seek to down office campuses and to build logistics and distribution centers. This resolution comes after the firms had spent millions of dollars trying to renovate the office building. More than 15 million square feet of offices across the U.S. have conversed into industrial use — a 33.7% increase over two years, according to Connected Real Estate Magazine. The U.S. industrial property vacancy average was 3.8% compared to nearly 19% for office properties. Of the nearly 15 million square foot conversion dedicated for storage, very few entailed repurposing buildings that were originally offices. Recent efforts to convert office spaces into large distribution facilities have been met with community resistance from neighbors.

Some commercial real estate landlords remained hesitant to convert their office spaces into something else, believing their tenants will return at some point, but after three years they are beginning to accept the shift to hybrid and remote work may be permanent. Noting that while the possibility of tenants returning to office spaces is highly likely, it will not be at the same scale and other uses will be considered to fill empty spaces and buildings.

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Introduction Last summer, an attorney filed a legal brief he had written with the help of the generative AI platform, ChatGPT. The document included citations to a series of legal cases that seemingly offered precedents that supported his client’s position. There was only one problem. As the judge in the case discovered, six of those cases did not exist. Instead, they were dreamed up by the online tool. This was only one of several high-profile incidents in which new technology has sometimes embarrassed the lawyers using it. Yet many legal experts believe generative AI will also change the legal profession in ways that will aid lawyers and their clients. Lawyers must be accountable for how they use AI. Not only must they carefully assess any bias inherent in algorithms before using it, but they must also consider ethical and fairness issues. AI holds tremendous promise to free legal professionals from the most time-consuming tasks, work more efficiently than ever, and empower them to focus on strategic projects that truly matter. Still, there are many ethical considerations of AI to keep in mind. Ethical Issues Depending on your jurisdiction, there may be formal ethical opinions addressing the use of AI. Be sure to confirm the existence of these ethics’ opinions or guidelines and how they apply to the use of AI. Bias And Fairness AI uses trained algorithms to analyze vast amounts of data. These algorithms can collect biased historical information, which means that the AI system may also inadvertently produce biased results, leading to questionable outcomes. Algorithms can be difficult to interpret, and it can be challenging to understand how they arrive at their decisions or source information. Privacy AI systems often rely on sizable amounts of data, including highly sensitive and confidential information, and may store personal and conversation data. When using the technology, lawyers need to ensure that AI systems adhere to strict data privacy regulations. For example, lawyers using ChatGPT must familiarize themselves with its Privacy Policy and Terms of Use before using the service. Additionally, they must make sure that the data is only used for the specific purposes for which it was collected. Lawyers must also consider professional obligations relating to privacy and information-sharing when providing any information with AI systems to ensure they are not running afoul of confidentiality obligations (to clients or other parties) or otherwise disclosing information improperly. Responsibility And Accountability As a rule of thumb, AI should be used as a complement to work, and not a replacement. While AI can streamline time-consuming and mundane tasks, strategic decision-making, complex legal analysis, and legal counsel are all examples of responsibilities that it simply cannot take over. As a result, lawyers must be proactive in establishing clear lines of responsibility and accountability when implementing AI in their firm. Summary As the use of AI in law firms becomes increasingly widespread, it is important that legal professionals address the ethical considerations surrounding it and ensure the technology is being used responsibly. By doing so, lawyers will be able to enjoy AI’s benefits while maintaining an ethical practice at the same time. In the end, AI has its benefits but it should not be relied upon to accurately apply the law to a fact pattern in the context of giving sound legal advice. Accurate legal advice includes understanding the context in which the law exists, experience and human thoughtfulness.