What do you do when large tenants aren’t there to lease office space in your big empty office building?
Do something else with it. Maybe you can turn it into a medical building or demolish it to build a warehouse, convert it a mixed-use space with retail on the ground floor, or build housing instead.
“We are seeing the aging of what was once the greatest office building boom in the history of New Jersey,” said economist James Hughes, dean emeritus of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University. By 1990, 80% of the inventory of office space in the Garden State was built during that 10-year period.
White-collar work grew, fueling the need for large office spaces. But innovation in information technology, such as the development of more powerful computer chips and desktop computers, the internet and the smartphone, began to herald a change, Hughes said.
“We didn’t have to have legions of clerks doing all sorts of work,” Hughes said. “All of that was automated.”
The COVID-19 pandemic, which darkened office buildings in 2020, changed it all. Employees worked from home. Meetings were held over Zoom or Microsoft Teams.
“We had five years’ advancement in five weeks that has changed the nature of work forever,” Hughes said. And it led to lots of excess office space. “We could say it is overbuilt and underdemolished,” he said.