A changing downtown landscape

3/5/2025

Downtown Des Moines is changing, especially in regard to how people work. Before the pandemic, it was apparent that Des Moines was a hub of office buildings full of workers, many of them commuters, who created a vibrant community supporting a variety of businesses. When the pandemic set in, many employees began to work remotely, businesses cut back on office space, and some long-standing businesses closed downtown. 

However, signs of recovery exist. According to the Greater Des Moines Partnership, daytime foot traffic saw an increase by 7% in 2024, which outperforms the national average in terms of recovering from the pandemic. Although signs of recovery can be seen, the downtown business district remains changed.

 

The state of downtown office spaces 

The pandemic has shifted the way downtown Des Moines functions as a place where people come to work. According to a report published by CBRE Realty, the office vacancy rate of downtown Des Moines was 22.3% by the third quarter of 2024, which exceeded the fourth quarter of 2019, which was 12.5%, by nearly 10%. These statistics align with the national average of office vacancies of 20.1% in the first half of 2024 reported by Moody Analytics.  

A contributing factor is the relocation and downsizing of Wells Fargo from its downtown location. In 2023, Wells Fargo, a major downtown employer, moved its downtown workers to its West Des Moines location on the Jordan Creek campus. This announcement was followed by the news of Wells Fargo selling additional properties located downtown. 

Despite this, organizations like the Greater Des Moines Partnership are passionate about Des Moines’ growth in the upcoming year. 

“Our foot traffic increase outpaces that of many other cities across the country,” Renae Mauk, vice president of development with GDMP, said. “Downtown Des Moines is an attractive place for workers, residents and visitors, and we see that reflected in not only workday foot traffic but also in evening and weekend foot traffic, which has seen a strong recovery over the past several years.” 

Mauk attributes this increase in foot traffic to the pandemic recovery. Events like the Downtown Farmers Market and World and Music Festival also draw in thousands of people and continue to increase. 

Steven Slye, the founder and CEO of Flowstate Health, has also been noticing this change from when he first started working mid-pandemic. 

“What I think is fascinating… is that downtown lost so much of its commerce. We lost Kum & Go. We lost Walgreens… but it’s just been a steady increase. It’s more and more and more,” Slye said.

 

Remote and hybrid work 

Another result of the pandemic has been a growing popularity of remote learning and work. Quarantine offered a new perspective on being able to stay at home, while the technology to do so boomed. Once it was over, some people decided they did not want to return to the office full time. However, many have since found they miss the opportunity for in-person interactions.

Cory Anderson is one of those people. After finding a new job with Aerop Pay, which required him to work remotely full time, he was initially excited about the opportunity. However, he realized he still valued an office space and community rather than communicating with his coworkers through a screen. 

“For me, working (remotely) means having some sort of tie, culturally, to the office, too,” Anderson said. “Whether that’s how you interact with your teammates, you’re just doing it in a different setting. Rather than face to face, you’re doing it over something like Zoom.”

That’s when Anderson came across Gravitate Coworking. Companies like Gravitate and Collaborate DSM rent out office spaces. Their primary purpose is to foster community in their own personalized work environment. 

“Rather than work at home in a basement or tripping over the laundry basket that distracts you from work, (our clients) want a professional workspace they can go into and want to have workplace colleagues they can grab a coffee with,” Geoff Wood, founder and CEO of Gravitate Coworking, said. 

Gravitate offers a variety of payment plans that allow employees to come in a couple of days a week, every day, or have a permanent desk — options that can accommodate individual work schedules. 

Like Gravitate, Collaborate DSM works with people in different industries such as financial advisors, therapists and tech startups. 

“I feel like there’s so much office space available downtown right now, with a lot of the big players moving out of that area. But, you know, I think we kind of have a niche on Ingersoll… I definitely worry about larger office spaces, as I think more and more people are moving toward working from home or wanting something a little bit more niche in community programs,” Jackie Akerberg, head collaborator of Collaborate DSM, said. 

Slye’s work with Flowstate Health requires him and his employees to rely on remote calls to make an impact. The company works with hospitals and jails to provide mental health services online with telehealth. Because Flowstate’s work is primarily online, Slye can hire the best therapists in Iowa, not just the people who live in a certain proximity to his office. This reach also allows Flowstate to work with rural communities rather than just cities. Slye says staff can cover 10 or more hospitals for the same cost a hospital would pay to hire a psychiatrist for its staff.

“Flowstate, more than almost any other (organization), is leaning into remote work,” Slye said. “Part of that has to do with what we do, and part of that has to do with how we do it. We believe that remote work supersedes artificial intelligence in terms of mastering the post COVID-19 world.” 

 

The future of downtown Des Moines 

Des Moines is currently on the path to expansion with many new projects either completed or in the process. Two Rivers Marketing is moving into a new space on East Grand Avenue, and American Equity Life Holding Co. is planning on relocating to the Nationwide Building downtown, bringing 650 employees in the move. 

“Future Forward Vision Plan and Action Plan was approved unanimously by the Des Moines City Council as part of the city’s comprehensive plan,” Mauk said. “The plan is serving as a community roadmap and addresses a number of ideas to ensure downtown remains a vibrant place for those who work, live and visit.” 

“We’ve seen companies requiring people to return to the office. That’s fine if that fits their culture,” Wood said. “(However,) there’s always going to be companies that want to use remote work as a benefit for working for them.” 

As much as downtown Des Moines is filling these office spaces, it is also becoming a trendy place to live. According to another report by CBRE Realty, 1,146 new housing units are planned for construction within the next two years, proving that downtown is increasingly a place for people to live.  

“From a real estate perspective, my hunch is that no one wants to build more offices when there’s a high vacancy rate,” Anderson said. “The change that I’ve seen is more embracing downtown as a place to live. We’ve seen some of the office buildings like the Two Ruan Center being converted into residential spaces.”  

As Downtown Des Moines settles into a new post-pandemic norm, it will certainly look different than it did a few years ago. Signs are good that the future will be a vibrant one, with perhaps fewer offices, but more residents and more of the businesses that support them. ♦