There was an article in the Philly Inquirer recently that might shed a little light on one of issues that might be underlying this and the article focus was on all the empty office park space around the Philly metro area.
The reason? COVID and more people working at home.
There have been a number of both large and medium-sized (white collar) companies that have opted to let their employees work from home either part or full time and thus there has been no need for using all that space in the billion office parks that got created the past couple decades. I.e., the cost of utilities and other amenities like maintaining an employee cafeteria, etc., (let alone reducing the need to pay for a lease) are borne by the employee, and that can provide a major cost savings for that company.
What some of the townships have been doing here is looking at possible zoning changes for conversion of that space to light manufacturing (including pharmaceuticals), fabrication, mixed use, and/or residential.
Commercial Real Estate
Suburban office parks now have millions of square feet of new vacant offices — enough to fill more than 2 Comcast Centers
As employees go remote, suburban Philly office buildings could be repurposed or torn down. Companies are “getting rid of overhead,” said one township manager.
by Bob Fernandez
Updated Nov 1, 2022
When real estate investors Zach Moore and Tony Grelli toured the hushed offices of the former 1,000-employee Nationwide insurance complex in Harleysville last month, lights turned on as they passed rows of empty desks. Moore gestured to some of the $2 million of abandoned office furniture, including hundreds of ergonomic chairs (retail value $800 each) and blond-wood desks. Stacks of colorful trash receptacles lined courtyard windows.
He and Grelli can’t sell the stuff because a glut of used office furniture after COVID-19 has saturated the resale market. They’ll pay a hauler $150,000 to take it away. “One day, 50 years from now,” Moore said later, “I will tell people you could buy an office building for the same price as an old manufacturing building because there was a global pandemic that sent everyone home, and they won’t believe it.”
The Nationwide complex closed in 2020, most of its employees permanently assigned to work remotely after the COVID lockdown. Moore and Grelli closed a deal last week to buy the building, with ambitious plans to revitalize the space.
“There has been recognition that the old way of working is going to change.”
Scott Miller, executive vice president at CBRE
Almost a quarter of the vast Pennsylvania suburban office market is vacant, says the commercial real estate firm CBRE, with more than one million square feet in the Pennsylvania suburbs emptied this year so far. Since early 2020, the amount of vacated space totals three million square feet — the equivalent of more than two Comcast Center towers. Acres of asphalt make up much of today’s suburban scenery, as parking lots sit empty.
(snip)
https://www.inquirer.com/real-estate/commercial/office-vacancy-rate-philadelphia-suburbs-return-to-work-remote-20221101.html
No paywallIn this case, the employment situation for the sectors that use these buildings has not changed (i.e., the businesses are still viable and vibrant).
The difference is where they are housed during the work day and that has an effect on any surrounding small businesses (e.g., restaurants/bars/food trucks/convenience stores/take-outs, dry cleaners, pharmacies, small grocery stores, etc) that relied on the office park employee foot traffic.
The article basically goes on to say that some in the construction/renovation industry are pivoting to taking advantage of repurposing that space for other uses - e.g., if not for residential, for distribution or even "light industrial" use.
It's interesting that for many years, this was the subject broached in sci-fi and by futurists. But the catalyst of a pandemic seems to have set that once far-off vision, in motion.
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