The Journal’s View: Full downtown recovery may require shift in office model
Staff ReportMay 19th, 2022
An urban traffic report that has caught the attention of some members of the business community here brings to light some tough issues regarding the future of downtown office space.
Although Spokane isn’t one of the 10 metros examined in the recently released Inrix “Back to Office” report, its conclusions likely can be applied widely. Perhaps the most sobering statement in the report is: “Downtowns need to shift away from an office-based model to increase economic viability,” as workers aren’t rushing back to office space, and many major employers have adopted remote or hybrid options, some permanently.
Building owners and leasing agents would be wise to be aware of the report’s findings before current leases expire.
For the most part, downtowns saw larger slowdowns in travel activity during the pandemic than suburban and rural areas, the report states, and downtowns continue to lag in terms of recovery.
Some commercial real estate brokers here say the situation in Spokane isn’t as dire as it is in first-tier markets, where major employers can take up entire high-rise buildings.
Clayton McFarland, BOMA president and commercial leasing manager with Goodale & Barbieri Co., says many tenants that have gone to the hybrid office-remote work model reconfigured their office space to make employees more comfortable rather than downsize their office footprint.
He does say, though, that downtown is quieter than before the pandemic, except when sporting and entertainment events bring out-of-town visitors to the city core.
The Inrix report suggests repurposing office buildings into housing, boosting entertainment and the arts, and other revitalization measures should be explored.
Spokane property owners have some experience in converting vacant downtown office and retail spaces into residential buildings even before the pandemic. Examples include the Chronicle Building, at 926 W. Sprague; The M Building, at 608 W. Main; and the Marjorie Apartments, at 107 S. Howard.
Jon Jefferys, of NAI Black, is hopeful such conversions will bring more residents downtown to offset the hybrid and remote work trend.
“That’s healthy for the core, so it’s not just a 9 to 5 city,” he says.
The Inrix report points out that only two of the 10 cities analyzed—Nashville and Denver—have seen an increase in travel to their downtowns compared with pre-pandemic levels. In Nashville, traffic volumes have increased during evenings and weekends, indicating that work-related trips may not be the main driver of economic activity downtown.
Looking more locally, building owners and managers should perhaps keep an eye on Greenstone Corp. at the Meadowwood Technology Campus, in Liberty Lake, which plans to increase residential and community amenities at the office park to adapt to remote-work trends. Perhaps some of those ideas could be applied downtown.
The stakes in downtown recovery are high, involving not just building owners, leasing companies, and corporate employers and workers. Many family-run businesses, restaurants, large and small retailers, and service providers depend on an active, vibrant, and economically strong downtown, where the future of downtown office space will be the deciding factor.
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