Gensler Report Suggests Help for Struggling Central Business Districts

By Nick Pipitone

The pandemic and shift to remote work have battered city central business districts (CBDs), and many still haven’t recovered. A recent Gensler report suggests ways to re-invigorate downtown cores by adopting a mixed-use mindset. “The trend away from single-use CBDs into places with a greater mix of uses will continue,” Gensler writes in the Cities and Urban Design section of its 2022 Design Forecast. “Diversity in building types and uses, and diversity at many different levels (city, neighborhood, building) are key.”

The report says more residential and pedestrian-oriented uses with more green space can help turn the tide for downtown cores, many of which have been emptied out as people continue to work from home. The design recommendations are something office landlords and urban planners may have been thinking of already. Even before the pandemic, downtown rents and property values have trended downward. COVID-19 accelerated the trend, leading to shuttered offices and sometimes deserted streets.

The average sales price of CBD assets peaked at $400 per square foot in 2019, falling to $379 in 2020 and then hitting a historic low of $284 in 2021, according to an analysis by YardiMatrix. City planning experts point to these numbers and are calling for a different design ethic for downtown cores, changing them from central business districts to “central social districts.”

The idea is for more mixed-use development rather than the traditional retail shops and offices that stand empty at night and on weekends. Gensler provides an example of this in a project they worked on with Brookfield Properties, Highlight at Houston Center. The 170,000-square-foot mixed-use development includes dining, retail, and entertainment connected to Brookfield office buildings by a sky bridge.

The pandemic has had a profound impact on downtown cores, but it doesn’t mean they’re dead, they just have to be redefined. Mixed-use projects like Highlight at Houston Center and others could be sought-after places as ‘central social districts’ where residents can live, work, and play. Developments like this may become more common as the pandemic changes the real estate world. At this point, anything seems better than the alternative of empty urban downtowns with shuttered offices and rarely-used retail spaces.

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