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Revitalization Is Key To Pandemic Recovery In Real Estate

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Cindy Diffenderfer is the CEO of Orion Haus, a leader in the home sharing industry – turning everyday renters into real estate investors.

I don’t have to tell you what the pandemic has done to commercial real estate. With so many people still working from home, both now and into the foreseeable future, it’s clear that revitalization must become a part of our recovery strategy.

In small towns, revitalization is naturally occurring. People are realizing they don’t have to be in the office, so they’re moving into suburban and rural areas and going back to their roots. 

We’re seeing that transient trend already happening from major metro areas. You just don’t have to be in New York City in Times Square or on Wall Street to do your job anymore. Companies have now invested in hardware, software technology and IT security solutions so that people – lawyers, bankers, everyone really – could work from anywhere. 

The behavioral trends of working from home and the migration further into rural areas are going to continue, because once you’ve sampled it and once the investments have been made, it’s much more difficult to go back to the city-dwelling rat race.

Looking At Old Spaces In New Ways

How are we working to solve these challenges? With the tourism industry hurting, investors are acquiring depressed hotels in secondary and tertiary markets. They’re reappropriating that empty inventory into usable and affordable housing, taking hotel rooms from empty spaces to affordable housing, such as micro apartment units. 

Then there are brick-and-mortar retailers. With online and delivery services booming, many of these businesses are transitioning to accommodate the new realities of retail. We began with the migration from the traditional downtown square or Main Street, followed by the rise of the shopping mall. Today, the shopping mall has been severely impacted by Amazon and direct-to-consumer goods. People just aren’t going to the mall the way they used to.

One excellent idea for how to repurpose these spaces comes from Sweden, where the world’s first mall for recycled goods was created a few years back. In it, people can drop off unused items for repurposing and recycling, and they can also shop for new items donated by others. It is a highly sustainable and socially responsible business model – one we can learn from here in the States.

Right now, there’s a lot of dead real estate that needs to be rediscovered, and now is the time to look at what other industries are doing for best practices and creative ideas to bring new purpose to old properties.

From our perspective in the housing market, we have seen Airbnb as a potential model for those retail centers. We’re looking at repurposing shopping malls into 55-plus and seniors’ assisted living centers. Following the Airbnb model, these operate like transient living spaces so that people can be more mobile, living in different areas in the later stages of life. 

Still, there’s a lot of dead real estate that needs to find new life to fit with modern needs.

Creating Spaces That Foster Connection

With office buildings, shopping malls, and depressed hotels, turning empty spaces into affordable housing is just the first step. There’s also a deep need for connection that must be addressed in order for these repurposed spaces to become and remain successful. 

How do we accomplish that connection? With a lot of programming and unique ways to engage with people.

With office or hotel spaces becoming housing centers, what kinds of opportunities can we provide so that people living and working there can feel a connection to others? In the old days, the corner bar offered this kind of space, but millennials have adopted healthier lifestyles, so this must somehow be addressed for their needs to be met.

Coworking spaces that mimic traditional office spaces versus working from home alone are a huge plus when it comes to the living spaces of the future. In the past, there would be a large coworking table or two, and then one or two private offices connected by a community printer. Now, it takes half of a floor to dedicate to coworking more effectively, because people need more individualized spaces. Though working from home is desirable, it can also be problematic if you’ve got roommates or kids or partners who are also working from home. So that coworking element is a huge driver for residential plans. Suddenly, it’s taking a much larger share of the allocated amenity space.

Digital Nomads Can Repurpose With Homesharing

Along with the post-pandemic changes in the workplace, there are those who are starting to travel again and want the flexibility of working as a “digital nomad.” This is where another new idea comes into play: homesharing. For example, if you take a lease with a home-sharing company for $2,000 a month on an apartment in Miami or Chicago, you can rent out your apartment anytime you’re not using it.

If you’re out traveling and working from anywhere at least 50% of the time, you can make 100- 200% of your actual rent. This way, the apartment not only pays for itself, but you might actually be able to profit. This enables younger workers in particular to enjoy big city life plus travel flexibility without huge financial commitments. But it can also be a solution for older, retired people, especially those on fixed income or who live in areas where the cost of living is going up.

The bottom line is, while the pandemic has changed the paradigm of traditional uses for real estate, it has also opened up new possibilities for both commercial and residential markets. Looking at old spaces in new ways, while addressing the emerging needs of a newly flexible workforce, is the key to keeping these spaces alive and useful long into the future.


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