The art of the city: how creators may save urban business districts
Source: Smart Cities World Published: January 25th, 2020
Everything that we knew about cities — and about commercial real estate — prior to March 2020 is being cast into doubt. All of our assumptions about commuting, public transit, urban density, retail and restaurants are now out the window. We don’t know what the new normal will eventually be, but it is almost a certainty that things will not go back to the way they were at the beginning of last year. What started out as a temporary health crisis has morphed into a fundamental shift in how we all live and work. And even when vaccines and cures for Covid-19 are widely available, it is unlikely that we will simply reset the clock. This is a new world for everyone, including owners and operators of commercial properties in urban areas.
No matter how you slice it, the numbers are pretty dismal. Record numbers of retail stores and restaurants are closing. Residential vacancy rates in major American cities have never been higher. Work-from-home policies that have turned downtowns into ghost towns are expected to continue even when the pandemic ends. Office towers that are currently under construction might not have a full complement of tenants when they open their doors. In this world of bad news followed by more bad news, many people are wondering if cities even have a future.
I tend to be a bit of an optimist, and while a lot of commercial real estate is being abandoned by tenants who can’t afford the rent or no longer need the space, I don’t believe that downtown areas are going away. Far from it. But I do think that they will be much different five years from now they were even a year ago. Of course, there’s no way to predict exactly how cities will evolve over the next few years, much less over the next several decades. After all, what are property owners supposed to do with a 15,000 square-foot law office with no lawyers in it?
The answer may lie with artists. Creators have always been the proverbial canary in the coal mine when it comes to the urban future. Painters, musicians, sculptures, and other artists have always been on the hunt for low-cost spaces where they can do their work. It’s hard not to think of bohemians in their loft studios in lower Manhattan back in the 60s and 70s when we think of artists. But thanks to the New York real estate boom of the 1980s, many of those artists were pushed out as neighborhoods became more desirable for commercial and high-end residential tenants. Today, a former “crash pad” in Chelsea now rents for $40 a square foot. And instead of being occupied by a metal worker, it is most likely home to a software company. Or at least it was until the pandemic hit. As 2020 ends, there’s a high likelihood that the space is sitting there vacant.
Click here to read more