Construction + Economy

City Downtowns Evolving Away From Office Use….What’s Next?

The pandemic has changed office work in many ways. Companies that are creating new offices are doing so predominantly in suburbs now, rather than downtowns. Many companies and industries have accepted hybrid and remote work arrangements, dramatically reducing the need for office space altogether. Many think these changes are here to stay for the foreseeable future. In 10 of the largest US cities, office occupancy averages are less than half, roughly 44% as of mid-August, of what they were in 2020 before the pandemic hit.

Will this bring the death of urban downtowns? Leading urban economist & professor Richard Florida argues in Bloomberg that downtown districts will continue to survive and evolve as they always have. Florida says that city downtowns have survived far worse than the pandemic’s current upheaval of the office real estate market. Downtowns have continuously adapted to great fires, floods and natural disasters, epidemics and plagues, wars, deindustrialization, and terrorist attacks. He points out that downtowns dominated by office buildings are as recent as the 1950s. Prior to that, they were filled with small businesses, factories, and residences.

Prior to COVID, downtowns were already shifting to restaurants, nightlife, cultural venues, schools, apartments & condos, and other services and amenities. The pandemic and its persistent increase in remote work have accelerated this shift. Downtown housing costs have recently rebounded and skyrocketed past pre-pandemic levels. This incentivizes more conversion of older downtown office buildings into residential apartments & condos. Some cities, including Salt Lake City, UT; Columbus, OH; Fresno, CA; and Bakersfield, CA have rebounded beyond pre-pandemic levels. Florida suggests thinking of downtowns as connectivity districts, a city’s most central location for business and social meetings at restaurants, cafes, and other venues. Read the full article here.

What does this all mean for lighting? Total office space is likely to decrease. New office construction will shift from downtowns to suburbs and small city locations that minimize commutes. Downtowns will continue their shifts toward restaurants, nightlife, cultural venues, schools, apartments & condos, and other services and amenities. This would argue for expansion of light commercial and resimercial lighting product lines.

How do you see the urban lighting markets changing? Please share your observations in the comment section below.


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