POST-COVID TRENDS
Since the popularization of the internet, many urban planners have predicted the growth of remote work and a decentralization of cities. With the start of the Covid-19 pandemic and the relative safety of “social distancing,” remote work became common in many industries, especially those clustered in downtowns and suburban office parks.
Before the pandemic, approximately five percent of paid work hours were remote with that number rising to about half of all paid work hours being remote between April and December 2020. Many companies have required their employees to return to the office; however, some economists predict that 20 percent of workdays will be done remotely in the post-pandemic era.
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CHANGING ENVIRONMENT
The rise of remote work has not been as much of a disruption as it could have been. Even with most remote workers still tied to the location of their employers and working at least some hours in a central office, these changes have still led to shrinking demand for office space that will affect cities, including Winston-Salem and its surrounding communities, for years to come.
Adding to changes from remote work, the merger of BB&T and SunTrust banks, which moved many employees to Charlotte and left Winston-Salem’s iconic green glass BB&T Financial Center building vacant, has also had a significant impact on local office space vacancies.
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CHANGING DEMAND
The changing demand for office space has put some types of office buildings in greater demand than others. According to Mark Fulk, the founder and president of The Meridian Realty Group, in Winston-Salem, there is a larger market for office buildings that are flexible and can offer less space. Fulk says there is less demand for single-tenant space than multi-tenant space.
Buildings that require tenants to lease one or two floors, rather than half a floor, are in less demand. And with low rents for office space, it’s hard to make the numbers work to spend money upfitting buildings to accommodate more tenants.
CHANGING USE
Office to residential conversions may help alleviate an office glut and create housing that is sorely needed. However, not all office buildings can easily change uses. Adding plumbing for many more bathrooms can be a challenge. And residential spaces need to be located closer to windows than office spaces. Even a building like the Wells Fargo Tower, with its many windows, has a dark interior that would not likely be converted to apartments. However, just block north, the historic Wachovia Bank Building on the corner of Third and Main Streets is undergoing a residential conversion.
Some planners and writers see the emptying of offices as an opportunity to reinvent downtowns. Richard Florida, an urban studies theorist and best-selling author sees central business districts turning into “central connectivity districts” with people attracted to live downtown, not necessarily because of the proximity to office space, but because of the concentration of restaurants, bars, theaters, notable architecture, parks, and green spaces.
If Winston-Salem is growing a central connectivity district, it may begin on the margins of the central business district. New residential construction and industrial conversions are occurring in the Truist Ballpark, Industry Hill, and Innovation Quarter areas.