Schools in Vacant Commercial Space

Commercial real estate in central business districts and suburban areas is experiencing alarming increases in lease vacancies and foreclosures. 

The Cushman & Wakefield 2025-Q1 Marketbeat Report lists 17 major U.S. cities with estimated vacancies of 25% or higher! This is nearly three times the historical commercial vacancy rate and represents about 1 billion square feet of unused space. Factors such as working-from-home, high mortgages, economic shortfalls and societal issues have played a role in these vacancies.

Can education institutions play a role in filling the gap?

A 2020 General Accounting Office report said that about half of the nearly 100,000 public schools in the United States need extensive renovations. Nearly 40% of U.S. public schools were constructed before 1970, the National Center for Education Statistics says. Most of these facilities struggle to meet students’ needs because of their outdated and run-down conditions. Major renovations needed include ventilation systems, building envelopes, learning spaces for new teaching methods, and new designs supporting science-based research for learning. 

Should school entities consider repurposing available commercial facilities versus constructing new buildings? Repurposing space may be enticing to schools and universities faced with the high costs and lack of availability of new land, and expenses and delays in preparing new land. Renovating an existing space typically take less time than new construction. (But beware! Perform a facilities analysis to determine if repurposing and renovating a facility is an opportunity or a nightmare.) 

To ascertain if a school program fits in commercial or a big-box space, consider the following: 1) Building location is critical for public school attendance areas. 2) Hire a school design architect to conceptualize the building for education space, analyze space needs, assess facility conditions, and work with city planning and zoning agencies. 3) Determine if spaces can support learning objectives and neuroarchitecture design strategies (e.g., small learning communities, ample daylight in spaces, or a potential to add windows or skylights). 4) Select a facility conducive for agile space configuration with column-free structural bays and minimal bearing walls that would limit layout flexibility. 5) Perform a cost analysis for renovations needed. Commercial facilities typically have systems—finishes, fixtures, ventilation systems—that have shorter life expectancies than school buildings because of short-term tenant improvement cycles and leasing terms. 

A cost analysis will reveal expenditures needed for retrofitting mechanical systems (e.g., fresh air ventilation requirements, size and age of air handling units, energy management controls) and electrical systems (lighting and distribution, Wi-Fi and cabling technologies, fire alarm capacity). Costs for architectural infrastructure (structural components, building envelope), architectural interiors (partitions, ceilings, floors, fixtures), and site development (parking lots, sidewalks, lighting) are also evaluated.

If column-free space is available in a commercial space, it can accommodate activities (e.g., indoor courts, track, natatorium) and performances (auditoriums, large rehearsal rooms). Look for on-grade access areas for trades programs (construction lab, auto shop), and outdoor physical education (playfields, tennis courts). These components typically need to be incorporated into facilities via additions and alterations, which increase costs. Repurposing commercial space for education typically better fits “specialty” programs—career programs or special skills focused schools.

As reports prevail about excess commercial space, many school districts are experiencing their own building closures because of population declines, enrollment shifts to private or home schooling, and budget reductions. These vacant facilities also are available for repurposing. Although expansion and contraction are expected as conditions and needs evolve, a pattern is developing that requires attention. With increasing vacancies, perhaps city and county governments should become central resources for community management, serving as conduits for “exchanges” in repurposing facilities.