Downtowns look to schools, labs, farms to fill empty office buildings

Walking around the cavernous, three-story spa she opened last fall, Stephanie Chon isn’t shy about pointing out remnants of what used to fill this brick-walled mammoth of a building.

The windows in the massage rooms are partly frosted over to hide a view of the parking lot. A water main near the nail salon is disguised as a plant. Reflective coating obscures the drop ceiling inside the Himalayan salt room.

And tucked away from the entrance outside, there’s still a sign that points to the Northern Virginia building’s most recent tenant: “United States Securities and Exchange Commission.”

“It definitely used to be a lot stuffier in here,” Chon said as she showed off a darkened sauna filled with eucalyptus-scented fog. “Trying to convert the space was a challenge, but we made it work.”

It worked well enough that the space’s transformation — from a drab federal workplace to an Indonesian-inspired wellness club — illustrates an out-of-the-box solution to a mounting problem: empty offices.

More than three years after the coronavirus pandemic began, workers have not fully returned to once-bustling downtowns across the country. Many government officials worry that they never will, sounding alarms about how such a reality will drag down tax assessments and threaten the revenue needed to fund public services.

Cities big and small, including nearby D.C. and Alexandria, Va., have sought to address this looming crisis by trying to turn vacant office towers into apartment buildings. It’s a buzzy idea that has drawn broad support as a way to reinvent downtowns while tackling a housing crunch, too.

Work from home has downtowns empty. A solution? Live in a former office.

But it may be easier said than done, with many newer office towers lacking the sunlight or plumbing to easily carve the space into apartments.

If that’s the case, then Chon’s Balian Springs spa — and a handful of projects like it sprouting up around the country — offers one alternative that is increasingly being explored by real estate brokers and local officials: Why not turn an empty office into, well, basically anything else?

“I don’t see a silver bullet or even a series of bullets that can solve the office-vacancy crisis,” said Dror Poleg, an economic historian and the author of “Rethinking Real Estate.” Yet, he added, “now that people are working in more places and moving around more throughout the day, suddenly there is low-hanging fruit that will become relevant to fill space.”

Some possibilities are already being tested. What was once the tallest building in Portland, Ore., is being marketed as a potential home for data centers to power cloud computing. Inside a 22-story Chicago office tower across from City Hall, there could soon be a vertical farm growing tomatoes and herbs.

And closer to Chon’s Northern Virginia spa, officials in Arlington County are trying to make way for a range of potential new tenants — from breweries and podcasting studios to doggy day cares — by loosening rules that limit what can go inside empty offices without the need for a government permit.

The idea of turning something built for one purpose into something else is by no means revolutionary or even particularly new. As buildings have been erected and economies have evolved, so too have our notions of what kinds of work can be done where: Factories have been turned into hotels, and hotels have been turned into college dormitories. Malls have been adapted for all kinds of new uses.

The approach championed in places like Arlington, a largely urban county that depends on offices for about half its property tax revenue, merely extends that mentality to more-static downtown environments long set aside for suits and corporations.

It’s a shift that can come with its own challenges: from architectural complications (How, exactly, do you replace conference rooms with distillery equipment?) and financing puzzles (Will an arcade really pay as much for a lease as a law firm?) to cultural expectations about what is supposed to go where (Shouldn’t a school be next to a grassy field? And don’t we need housing more than medical laboratories?).

Still, if the circumstances are right, some urbanists say, these more-unorthodox uses can help get rid of empty office space — perhaps just as well as turning those buildings into apartments.

D.C.’s suburbs, not just downtown, are feeling the crunch of remote work

Ryan Touhill, Arlington’s economic development director, said a “handful” of office buildings in the Northern Virginia jurisdiction — where the office vacancy rate is at a record-high 21.7 percent — might be poised for conversion into apartments. Everything else will require more creativity and a more multifaceted approach.

“The nature of work is continuing to evolve coming out of the post-pandemic years, and it’s an opportunity for us to think about how we use our land and what types of uses are in our buildings,” Touhill said. “Cities evolve. They’re living things, and we can’t be so stuck on one thing that worked in the past.”

There are no aromatherapy rooms or saunas at Bailey’s Upper Elementary School, which occupies a five-story brick complex near a busy highway next to Fairfax County’s Seven Corners area. But just like the spa down the road, this magnet school serving third- through fifth-graders was carved out of a former office building.

Longtime principal Marie Lemmon said it was all about adding more space to an overcrowded school.

A decade ago, all six grades at Bailey’s Elementary were housed a mile and a half away, in a more traditional building that was practically bursting at the seams. Fairfax County Public Schools had to bring in as many as 19 trailers to accommodate an extra 300 students over capacity.

When the county’s health office vacated this commercial office complex, the school system bought the property for just over $9 million. The challenge for school administrators and the architecture firm Cooper Carry then was retrofitting the L-shaped, 96,000-square-foot building into a facility fit for grade-schoolers.

“There were a lot of things that were creatively solved so that we could fit within the timeline, within the budget, with all the design constraints,” said Maureen Wiechert, who leads K-12 projects at Cooper Carry.

Architects put classrooms for each grade on multiple floors on the same side of the building, allowing students to move up and down through color-coordinated stairwells carved into the floor plan. Part of the surface parking lot was turned into a playground, and “movement rooms” with special wooden flooring were set up for the first few years of physical education classes. (A prefabricated gym was brought on-site later on.)

The library is perhaps the most atypical part of the building. It’s laid out in a “U” shape, interlocking with the top of an auditorium space where classes can shift for big presentations, music groups can perform or Lemmon can speak to parent gatherings. Windows separating the auditorium seating and library can be covered with curtains, if needed, to split the spaces up even further.

Wiechert said offices often have different safety rules than schools, making it necessary to add more-accessible fire exits in conversions similar to this one. In renovations at Bailey’s Upper, an alarm was added on each floor to mark rooms where first responders can meet injured students stuck in the building.

In Fairfax, a onetime bedroom community that has rapidly developed in recent decades, another challenge was convincing some neighbors that kids could learn just as well in a vertical office complex.

As Fairfax County School Board members were voting in 2013 on whether to buy the property, some residents expressed concerns that students wanting to play outside would be “subjected to exhaust fumes from six lanes of traffic.”

Yet as Lemmon showed off a huge corner classroom this month, she said those concerns have been rapidly eclipsed by the building’s benefits: modern and colorful hallways, unusually big windows with lots of natural light, some covered parking for teachers — and, most important, no trailers.

“We went from the have-nots,” she said, “to Beverly Hills around here.”

At Balian Springs, Louisa Moquete, 21, had just taken a dip in the wooden soaking tub on the rooftop when she learned about the spa building’s past life. She and her boyfriend had a chessboard open while awaiting their teriyaki sliders.

“Are you serious?” she asked, sipping a can of raspberry kombucha in a cozy lounging area. “Everything seems to fit so easily!”

Here, though, the architectural challenges — shaving thick concrete floors to make rooms taller and adding skylights to the roof — were only half the battle. Chon, the owner, said she had to go through an 18-month process with Fairfax County to secure a special-use permit that would allow her to convert the former federal office building into a health club. (This is not unusual for permitting processes, which must give residents time to provide their opinions and officials time to review plans.)

Before the pandemic, Fairfax County made changes to its comprehensive land-use plan — similar to the ones Arlington passed this year — that would make it easier for empty offices to be turned into apartments, hotels or schools, among other options.

But loosening rules does not mean that new tenants will come, some urbanists argue. Brokers and property owners also have to be willing to take a risk — perhaps more so than in Chon’s case, which relied on unique circumstances.

After the SEC ended its lease on the office complex, pulling out about 600 federal workers, the agency’s landlord tried in vain to find a suitable replacement.

He eventually sold the site for just $10 over the mortgage to the building’s lender. It sat empty for three years and rapidly depreciated in value before it was purchased for $9.75 million by C.Castle Group, a luxury hospitality company owned by Chon’s father, according to Fairfax County records. (C.Castle still owns the property and Balian Springs acts as a tenant for about half the space, Chon said.)

Chon said she and her father had initially been looking to spend half that much and buy a property half the size. As they looked at other sites in the area, the building’s lender approached her and gave them a “great deal” on the former SEC complex, she said.

Workers want to stay remote, prompting an office real estate crisis

Poleg, the urban historian, said most commercial landlords may not be as eager to move ahead with unorthodox conversions.

“Office-adjacent” uses — such as college classrooms, doctors’ offices or small distribution centers — could more easily replace rows of cubicles, particularly if tenants are willing to pay expensive rents. But even those projects — let alone ones that put an infinity hydrotherapy pool on the roof — could be a tough sell.

Take, for example, AgriPlay Ventures, which has transformed a floor of vacant commercial space at Calgary Tower Centre, an office building connected to one of the Canadian city’s best-known landmarks.

The company makes urban farming technology that’s supposed to make it easy to grow tomatoes, basil and other crops in tight or vertical spaces. Co-founder Adam Morand said landlords and their lenders have been slow to sign off on new projects elsewhere in Calgary and three hours away in Edmonton, given chaos in the banking sector.

Arlington has tried to roll out the welcome mat for urban agriculture companies like AgriPlay. In the spring, county officials worked to identify nearly a dozen industries that could set up shop in vacant office space and rolled back the approvals needed for that to happen.

So far, though, just one tenant has managed to take advantage of the new rules.

Arlington’s economic development office is trying to recruit more businesses that might follow suit. But Poleg warned that if brokers and landlords aren’t on board, offices will continue to sit empty.

“The real estate industry really likes simple stories: ‘We get it. Something has changed. Just tell us what to do now and we’ll all run in that direction,’” Poleg said. “Unfortunately, there’s no answer like that now.”

Story editing by Jennifer Barrios. Photo editing by Mark Miller. Copy editing by Beth Hughes. Design by Jennifer C. Reed.