According to McKinsey Global Institute, the value of “office space” is destined to fall by 800 billion dollars by 2030. Notice they didn’t say commercial real estate. And would it be different if they did? I think so. Value often changes in how we use something. It’s entirely possible that the value hasn’t gone anywhere, we’re just using it wrong. Most of us have been using an example of this since we were children, and we don’t even realize it.
Lets Play
Kids will play with almost anything – sticks, rocks, broken appliances. You don’t think of industrial cleaners as being a good thing for children to play with. But that’s the history of Play-Doh. In the 1930s, it was initially developed as a wallpaper cleaner. However, with the advent of vinyl-based wallpapers that didn’t require cleaning, Play-Doh faced an uncertain future. Determined to find a new purpose for their product, the creators noticed that children were using it for arts and crafts. They rebranded it as a child’s toy, and the rest is history. Play-Doh has since become a staple in playrooms, fostering creativity and imaginative play. Could office space be the next thing to be reimagined, or was Play-Doh just a fluke?
Glue That Won’t Stick
What could be more disappointing than developing glue that didn’t stick? Probably spending 5+ years trying to find a use for it. Such was the case of Spencer Silver from 1968 to 1974. What should have been a micro polymer-based adhesive for the aircraft industry turned into something that only would stick the paper to other things. Even within 3M, who Spencer worked for, management didn’t see the vision of a glue that didn’t stick. Then in 1980, Post-It notes were born. Unlike the Play-Doh example, there was no prior use for Spencer’s glue before Post-It notes. But it still took an outside perspective to see that there was a different use. And this is a common theme.
Listerine was never successful as a wound cleaner or equipment sterilizer. But once a marketing company let us know we all had bad breath, Listerine became the cure. And who would know the heart medication Sildenafil if it weren’t for an unusual side effect? Now everyone knows what Viagra is but for a different reason.
Space is Space
We make the mistake of labeling space based on what we think the best use is going to be. There is office space, retail space, studio space, etc. But are they really different? Warehouse and manufacturing space might be different based on ceiling height and span requirements. Lately, many of these have become great volleyball or pickleball courts. In some cases, the space is worth more based on those uses than what was originally intended.
The longer we call it office space, the longer we are going to limit its potential. Traditional office space will never get back to its 2019 levels. But what about container farms, cloud storage, loft apartments, micro-grids, medical facilities, co-working spaces, nightclubs, etc? All of these are viable and profitable uses for space currently sitting empty waiting for someone to use it as an office. It’s easy to sit back and cry about how working from home killed office space, but really it just made room for other things.
