The phenomenon that goes by the chilling name “zombie buildings” invaded office space and other sectors of commercial real estate during and after the COVID-19 pandemic. These are buildings that have fallen victim to the work-from-home (WFH) and hybrid-work phenomena. (Boston Consulting Group defines a zombie as a building with 50% or lower occupancy.) Turns out, the glut of these benighted properties shows little signs of receding.
The eventual solution to the issue, whenever it comes, will likely involve changes to zoning regulations, favorable tax treatment and other thorny, elemental changes. It’s not going to be a quick or easy fix.
One company that believes it has a solution is The Gettys Group Companies, which was founded in Chicago 35 years ago and now has offices as well in Manila and Jeddah. It develops and oversees projects around the globe as brand builders, interior designers, developers and purchasers, including FF&E procurement, freight management and installation oversight for hotels at every segment.
Recently, they’ve taken on these “undead” buildings, seeking to transform them into bottom-line-friendly successes. “There is a tremendous number of office buildings, comprising a staggering number of square feet, that are losing their viability,” said Roger Hill, CEO and co-founder of The Gettys Group Companies. “Buildings, particularly, but not exclusively, Class B and Class C, are at risk of irrelevance now, because people are downsizing and reducing their demand for office space.”
Reviving a zombie building presents a unique time of opportunity and a civic good, argued Hill. “Repurposing office and retail buildings is of enormous importance to cities and towns of all sizes,” he said. “Successful repurposing isn’t as straightforward as many imagine,” however. “It requires cooperation politically, financially and civically, and not all buildings are good candidates. You need to look at a lot of buildings before you can find one that makes economic sense. It takes creativity and experience to recognize the opportunities and challenges, invest appropriately, and renovate strategically.