Commercial properties are seeing a shift since the height of the COVID-19 pandemic. Experts have predicted for years that we would see an impact to these properties as more people work from home and some businesses have defaulted on their properties' loans.

What You Need To Know

  • Commercial foreclosures are seeing a steep rise over the last 3+ years, according to real estate curator ATTOM

  • The foreclosures increased 97% from last year

  • New York, California and Texas were among the states with the most commercial foreclosures in January; New York had 59

ATTOM, a leading curator of land, property and real estate data, released a special report on U.S. commercial foreclosures. The report reveals a significant climb in commercial foreclosures over the years, from a low of 141 in May 2020 to the current figure of 635 in January 2024. This represents a steady increase throughout the period.

Commercial foreclosures increased 97% from last year. States with the most commercial foreclosures for the month of January 2024 included California, New York and Texas. New York had 59 commercial foreclosures in January.

A local real estate broker who's repurposing vacant commercial properties into housing, offered a solution that he said he has used many times.

“Everyone always needs to take a good look at the housing stock for their community. Right now with such a shortage, I think what happens many times is that we have underutilized facilities," said Stephen Skinner, the owner of Skinner & Associates Realty. "It could be an old-school building, it could be factory, and I just think our country is very resilient with many people that have great vision for their communities, and I think we need someone in every community to look at and say 'Hey, what can we do with something that's sitting around; with the prices of new builds being so expensive, how can we retrofit, so we can take something that was maybe a negative turn into a positive?' "

One of Skinner's repurposing community projects is a former American Legion. It is now going to be known as the Taft Building. It is in the process of becoming 28 market-rate apartments in 2025.

Skinner adds with inflation, the housing market is impacting housing shortages and slowing development. While he complimented New York's grant offers for reimagining commercial properties, he says the process needs to speed up so the projects are completed timely.