Monday, July 15, 2013

What should we do with vacant office complexes?

This time in the land of skyscraperpage.com is a rather heated discussion about what to do with office complexes that are either becoming vacant or have been sitting vacant for years. This is an interesting subject. Municipalities view these structures, although abandoned, as taxable if they can be once again occupied. Therefore, some might poo-poo the idea of leveling these buildings in favor of the open/wooded areas that once occupied the space.

So the question is, do we tear down these buildings and let them become unused open land which in turn will likely drive taxes up to fill in the void? Do we try and market these buildings "as is" with the hopes of landing another office tenant? Do we reconfigure the current building, or redevelop the land and market the new development as mixed use? I have outlined the pros and cons for doing each of the aforementioned suggestions.

Razing for open space

This will definitely rub the environmentalists and nature-lovers the right way and add to the municipality as a priceless asset.  However, the municipality will lose taxable land and might resort to raising taxes on other uses to make up for the loss. If commercial space is already sparse in the municipality, then this might limit options of luring businesses or encouraging others to relocate or expand.

Leave them as is

Leaving the structures as is will keep the land on the tax rolls, but there could be some risk involved. If a building is about to become vacant, it might be a little easier to lure in another potential commercial tenant versus if a building has sat vacant for several years.

Reconfigure the existing building?

Taking the building and redesigning it in some way might increase your chances of securing another office tenant. Perhaps someone wants a more open office floor plan, or improvements (HVAC, better windows, lighting, etc) are needed. Some small modifications might improve the chance of luring an office tenant.

Redevelop

Perhaps it might be time to clear the slate and start over. Perhaps the demand is there that would warrant such an undertaking. Having mixed uses in one given location seems to be the norm in several areas, but it might not necessarily mean that each place should be developed or redeveloped as so. Is it accessible? What transportation infrastructure is nearby? What other amenities are close by or within walking distance? Is there sufficient demand?