Over the past several years, downtown areas in major and lesser U.S. cities have begun to decline across the board. Office buildings once teeming with workers, retail outlets once competing mightily for customers and restaurants once eager to cater to hungry diners are seemingly emptier and emptier. Even commercial real estate spaces that were considered “prime” just a few years back may be struggling with vacancy rates at staggering percentages.
There are numerous reasons for the decline of U.S. downtown areas. It has been widely suggested, for example, that decades of overbuilding office space fed a bubble that finally burst over the past several years. What remains is a great deal of unoccupied commercial space in these areas and questions about what commercial real estate investors and developers should do next.
It is not yet clear how quickly American downtowns will bounce back from their unusually vacant state. Some may bounce back, while others might not. As a result, those interested in investing in commercial real estate opportunities are going to need to pay particular attention to the trends that are affecting any specific potential investment location. Some opportunities will be much more promising than others.
At present, it seems that a boom in repurposing office space – from apartments to pickleball courts – may be the next big “thing” in commercial real estate. With that said, any particular boom needs to be carefully considered because just like overdevelopment of office space led to a burst bubble, so might this next repurposing push.
Due to the ever-evolving nature of the commercial real estate market, seeking legal guidance to better safeguard one’s interests tends to be a good call when investing in this kind of real property opportunity.