Developers have floated countless plans to convert unused office properties into alternative uses such as housing or even industrial spaces, but one firm is taking the trend to the next level with its novel proposal: overhauling those empty cubicles into a vertical farming operation.
Atlanta-based Jamestown Properties is asking city officials in the East Bay suburb of Concord, California, to consider its plan to fill the vacant office building at 2000 Clayton Road with an agricultural use as the firm weighs how to reposition the 300,000-square-foot space. Bank of America, which built the 15-acre office campus that includes the Clayton Road property, emptied the space earlier this year and will not renew its lease once it expires within the next couple of months.
The developer has yet to file a formal proposal for its plan to overhaul the property for an undisclosed vertical farming company, Concord officials confirmed. The plan marks Jamestown's latest attempt to reposition the 1980s building after several proposals to convert it into alternative such as housing or lab space.
Jamestown did not immediately respond to CoStar News' requests for comment.
While the vertical farming proposal is far from being realized, it is a sign that office landlords are scrambling to bring in new tenants to fill the abundance of unused workspaces scattered across the country.
In the Concord area, office vacancy rates have soared throughout the course of the pandemic, rising more than 4% over the past year to settle at the current average of about 20%, according to CoStar data. Leasing activity over that period has plummeted by nearly 40%, providing little indication that demand for traditional office space will rebound anytime soon.
Jamestown initially acquired the Clayton Road property as part of a $103.1 million portfolio deal that also included the nearby office building at 2001 Clayton Road. The sale closed in September 2018, according to county property records, and both properties were fully occupied at the time.
Vertical farming, where crops are grown indoors with less water than traditional farming and artificial lighting, has been a darling of venture capital firms for several years now, in part because of its cutting-edge technology. The vertical farms, essentially high-tech indoor greenhouses, were positioned as being able to produce food such as lettuce on a year-round basis, with no pesticides and little water, at a time when climate change is a concern.
The companies were also seen as a new kind of tenant for not only industrial space, but office space in places such as Chicago. But the industry has stumbled, as exemplified by a Chapter 11 bankruptcy filing by industry leader AeroFarms, and just may not have a viable business model because their operating costs are so high, according to some critics.