The Co-Living Space of the Future: Repurposed Retail Space
The decline of retail around the world is opening up space in urban areas.
In the new economy, brick-and-mortar retail is dying out, and many well-known brands are even facing extinction. The rise of one-click shopping means that more and more of us get nearly everything delivered to our homes without visiting a physical store. The economy is changing as we shift to websites such as Amazon for all of our random shopping needs. Needless to say, this shift in consumer behavior is decimating the retail sector. Across the world, we’re already seeing scary amounts of commercial retail space empty as online shopping goes mainstream.
Given that physical retail is facing a horrific downturn, the big question is: what are we going to do with all of the commercial space that will soon be unnecessary in the cyber economy? Especially in major cities where there is a seemingly endless amount of retail lining every major road, the thought of empty storefronts littering our thoroughfares is pretty disturbing.
Empty space is good news for the co-living sector
Amidst a sea of empty storefronts, failing retail brands and investors losing their shirts, there’s actually good news for our global housing woes. All over the world, urban areas are facing critical housing shortages, and converting these empty shops into living spaces could help alleviate these residential supply crunches.
One growing area in residential development that would be particularly interested in converting these spaces is the co-living sector. Co-living, defined as “any shared living space that improves quality-of-life for its residents,” is catching on in many of the world’s flagship cities where space is at a premium and loneliness abounds. In an era with excess commercial space and a ever-decreasing supply of affordable housing, repurposing empty commercial space into co-living spaces may be exactly what many areas need.
Co-living entrepreneurs who operate brands on nearly every continent see demand for shared living typically far exceeding the supply that’s available. In New York City, for example, co-living brands such as Common, We Live and Ollie report receiving far more applications to live in their spaces than what they have available.
Fortunately, this trend of shuttering retail is setting the stage for a world where plenty of space will come available in the immediate future.
The coming retail supply tsunami
Welcome to the new economy, where stock market valuations already reflect the downfall of retail. Today, Amazon is worth nearly twice as much Walmart in total market value. We’re getting close to the tipping point in the industry where online retailing becomes such a viable option that traditional brick-and-mortar businesses simply can’t compete. When you have to pay rent and run a physical space, it’s nearly impossible to compete head-to-head with a website-based retailer.
Fortunately, with changing demographics, the likely scenario is that yesterday’s commercial space will be repurposed into the housing of the future, and that includes co-living. A new generation of urbanites across the world already favor high densities and smaller living spaces. The dead retail of yesteryear could be the cool, hip, urban and affordable housing that we so desperately need.
Right now, there are already examples of repurposing old commercial areas into new, hip residential developments. In fact, America’s very first indoor shopping mall in Providence, Rhode Island was turned into a micro apartment project. It won’t be very long until the co-living sector follows suit and begins to build its future by tapping into the excess supply of retail space.
Forward-thinking local partners needed
Repurposing commercial areas into shared living spaces would be a win-win for everyone, as there will be little need for additional infrastructure (such as roads, water and sewer). Governments could see their tax receipts increase, and abandoned urban cores and enclosed malls would come alive with permanent residents, who could, in turn, help support what remains of retail spaces in the immediate area.
There’s little doubt that online shopping will continue to change the economy, and those changes won’t all be bad. Like any other technological advances, it simply reshuffles the cards and changes the game of doing business.
The world has too much retail space and not enough housing. Repurposing the excess amount of retail into housing makes economic sense. If regulatory barriers such as local zoning laws don’t stand in the way, mass repurposing, especially for co-living, could be a huge windfall to average consumers across the world.
