Page 42 - BusinessWest January 24, 2022
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office facilities, including the Greenfield Corpo- rate Center, said the past 23 months have been a struggle on many levels, especially as compa- nies find new ways to do business, with many employees working remotely.
Like others we spoke with, he believes employers will eventually bring workers back the office, for reasons involving productivity, com- munication, efficiency, and other factors, and when that day comes, the market will see a surge in activity.
In the meantime, this will remain a tenants’ market, with many of the companies looking
to downsize or just reduce their monthly rent expenditure finding landlords willing to make attractive deals, another trend that is expected to continue into 2022 and perhaps beyond.
As for the longer term, those we spoke with said that some (again, how much remains to be seen) of the traditional office space in the region will need to be repurposed, and it is incumbent upon those who own and manage it to start looking at viable options.
Stelzer noted that biomed is simply one of many possible alternatives.
“We have to do a really good job moving for- ward of cataloging what we have available, what we can pivot, what’s available for us, what the economic-development agencies can push,” he said, “because the days of the 200-person call center or 300-person call center are probably gone.
“So we have to turn around and figure out where people have to congregate, and lab space is one of them,” he went on. “There’s also an incredible demand for social services and mental-health space, which is partly driven by
COVID and partly driven by the large amount
of funding available for it; you may see some
of these nonprofits that would typically be in
a class B space or in space that doesn’t work as nicely for them taking the plunge and coming downtown or coming to a class A building; they can afford to do it, and demand for their workers is high.”
Stelzer said he’s already seeing such move- ment at one of the properties managed by Appleton, the Technology Park at Springfield Technical Community College. One of its major tenants, Liberty Mutual, has moved out of most of its space in the park (47,000 square feet) — part of a larger movement to have employees work remotely — and new tenants that have moved in include Mental Health Associates and Clinical & Support Options.
Since almost the very beginning of the pan- demic, Plotkin has noted that, in this region, where the office market has traditionally had a comparatively high vacancy rate, the additional stress from COVID will force some property owners to think outside the box and find new uses for their square footage.
For the building he co-owns, 1350 Main St. in Springfield, and others, he has proposed hous- ing or perhaps a hybrid concept, what he calls
a “remote-work hub,” a facility in which people would live and work.
“There would be a living space, something like a dormitory, but done in an upscale way, with a lot of amenities,” he explained. “And then you have a work hub. The idea is to have a liv- ing space and then a floor where you can lease an office, so you’re not working at your kitchen table.”
Whether the remote-work hub is the answer remains to be seen, he went on, adding that, from his view, it’s clear that something — and something imaginative — needs to happen within the office market, especially in downtown Springfield.
“We have to look at the half-million square feet of vacant office space that we have and examine how we repurpose and reposition that,” he went on. “We also need to look at what kind of help we need from MassDevelopment and the state to incentivize business owners — people like me — to take a building like 1350 Main St. and convert half of it to co-living space.”
Bottom Line
Looking ahead to the rest of 2022, those we spoke with said that COVID makes it difficult to project exactly what will happen. Stelzer equated the landscape in the sector to “shifting sands,” and said that, until the ground stabilizes, more uncertainty will prevail.
Overall, the experts are predicting more of the same for the foreseeable future, meaning this will continue to be a tenants’ market in the office realm, and the laws of supply demand will create more movement in the industrial and retail seg- ments of the market.
And it means more hard thinking — and some action — when it comes to deciding what can and will happen within the office market. u
In other words, it’s shaping up to be another busy year.
George O’Brien can be reached at [email protected]
  42 JANUARY 24, 2022
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