Walk through an office lobby in almost any town or city in the U.S., and you’ll see eerie signs of a bigger picture: office vacancy rates are at a record high in early 2023. And the D.C. Metro hasn’t been spared, either. A nearly overnight shift toward flexible work has changed the game in commercial real estate – an industry that cannot possibly adjust fast enough to not feel the sting.
Getting occupancy numbers up means giving people a reason to come into the office. The pressure is greater than ever for Class B and Class C buildings to, well, class it up a few notches. The only alternative is a full-scale commercial repositioning, or selling to avoid continuing to lose money on an aging asset with a dubious future.
The Washington Business Journal published an article, excerpted below, highlighting Pizzano's expertise and experience with building repositioning.
The Pizzano Contractors team has been tackling building repositioning challenges for decades. One of our favorite examples is 1201 Pennsylvania Ave. Since 1981, this stately beauty with great bones has held its place just a few blocks from the White House. In 2014, its primary tenant left, leaving the building rudderless. As the years went on, the building continued losing more tenants as they shifted to newer office spaces and remote work. When we started working on it, it was a sparsely occupied, former Class A building with dreams of being restored to its Class A status.
There were obstacles to overcome throughout the entire process, but our team worked hard to meet every one of them head on. It needed major structural changes to make sure it was up to code, the air quality was the best it could be and the building’s energy consumption kept operational costs in line.
What’s more, the building had been originally designed for that one main tenant that had moved out in 2014. All of the building’s original outdoor access points – the areas we wanted to add to and enhance – weren’t accessible now that the building was divided for multiple tenants. With help from Fox Architects, we had to reimagine and rearchitect the layout and access points to work for the building’s present day, multi-tenant realities.
It was a lot of work for all of the teams involved. But we made it work. Doing our best to do all the main work after hours, we upgraded the ventilation, overhauled the bathrooms and common areas, and transformed the dull rooftop into a tenant-friendly terrace.
Today, 1201 Pennsylvania Ave. is proudly back on the Class A list and near full occupancy – 95% – luring back discerning staffers with all the amenities and features that help people collaborate, ideate and do their best work. We were proud to help get it there and we can’t wait to restore the next gem to its former glory – with all the modern touches.