On the third floor of Pioneer Place, in downtown Portland, a transformation is taking place that is being replicated across the nation.

WeWork, a co-working company, is taking 34,000 square feet of former retail space in the shopping mall. In Portland and around the nation, retailers are closing stores, and many property owners and brokers are repositioning those vacant spaces for office use.

Particularly in Portland, there has been a seemingly inexhaustible demand for creative-office space that has helped buoy some of these former retail locations.

“There’s an evolution of things, and there’s an opportunity with every vacancy,” said Bob Buchanan, general manager of Pioneer Place.

Yet as major retailers such as Macy’s, J.C. Penney, Sears, Kmart, Radio Shack and American Apparel close stores, retail analysts are wondering where the bottom is, and to what extent conversions to other uses can absorb the slackening retail demand.

“The pressure of the Internet and people buying online, it’s going to take a toll, and it’s happening,” said Thomas Fellman, senior vice president at CBRE‘s Portland office.

The migration from in-person to online sales has been a long time coming. But it has accelerated in the past year and shows no signs of reversing.

E-commerce sales grew to 8.1 percent of total sales in 2016, up from 7.3 percent in 2015, according to the Census Bureau. Online sales last year totaled an estimated $394.9 billion, up 15.1 percent. Overall retail sales grew only 2.9 percent.

Online retailers have snapped up Portland-metro industrial space for shipping operations to better serve the area’s booming population of urban customers.

For Pioneer Place, the third-floor renovation for WeWork was born out of several retail vacancies. Fellman said he approached the mall’s management with the idea of converting the floor into office space.

“We came up with what we thought was a really good floor plate and lots of natural light,” he said. “I just started pursuing who I thought would be great tenants. It’s not for everybody.”

Fellman found a willing partner in WeWork, a co-working chain that is capitalizing on work trends in urban locations. WeWork expanded from its first Portland location at the U.S. Custom House in the Northwest Portland park blocks.

“I had a lot of interest from a variety of different businesses,” Fellman said. “WeWork was the most aggressive out of the chute.”

WeWork has its own entrance to the building from Fifth Avenue.

Many malls and other retail properties are moving to a mix of smaller tenants amid weakness for traditional anchor tenants such as Sears or Macy’s. Pioneer Place already caters to downtown customers with small luxury boutiques such as Louis Vuitton and Tiffany & Co.

Macy’s recently closed its store in the Meier & Frank Building, in downtown Portland, to make way for a creative-office conversion.

That trend is also playing out across the Willamette River at Lloyd Center. A space that was originally built for J.C. Penney when the mall opened in 1960 is being extensively renovated and re-leased in pieces. The first two levels at the east end of the mall will be divided into smaller retail and office uses. A 76,000-square-foot movie theater with 14 screens will occupy the third floor. The mall’s fourth floor will be removed at the east end. The project is being designed by LDA Design Group of Burbank, California.

Providence Health Services is taking 36,500 square feet of office space in the mall. That fits an explosion of creative-office development in central Portland. Projects are under way across the city, from the proposed Press Blocks in Goose Hollow to Overton 15 in the North Pearl District.

“There has been a consistently strong demand for creative office space in our market,” said Patricia Raicht, senior vice president for research at Jones Lang LaSalle. “Anything that’s going to be developed now is going to have some sort of creative office component.”

Demand for creative offices has moved beyond just tech firms, Raicht said. Now other, more conventional companies are interested in amenities and urban locations that command higher rents.

Delivery of new office spaces this year should prove helpful to tenants in the market, Raicht said.

“You’re going to see more options,” she said. “That’s really good news for tenants.”

Portland’s neighborhoods are changing too. Inventory-carrying retailers are giving way to service businesses such as restaurants, hair salons, yoga studios and gyms. Recently, a second location for a self-serve “kombucha speakeasy” on Southeast Belmont Street drew attention from Portland’s alt-weeklies. Customers access the building, and the $4 Soma kombucha, with a credit-card swipe. The company, Symple Foods, started with a location in St. Johns and promises “non-dogmatic spiritual whimsy” along with the fermented beverage.

The same trends are emptying big boxes, Fellman said. At the same time, residents are demanding services be in closer proximity.

“More and more, people are going to be closer to where they live and work and shop,” he said.

Among the inventory-reliant retailers that have left vacancies behind is American Apparel, which was beset by corporate-level controversies. The company closed two Portland locations, in the West End at 1234 S.W. Stark St. and in Southeast Portland at 3412 S.E. Hawthorne Blvd. American Apparel previously shuttered a Bridgeport Village location.

Some Portland property owners have prospered with small retail spaces that cater to boutiques.

“We tend to have smaller retail spaces, which are more attractive for local, independent retailers,” said David Schrott, a partner at A & R Companies, which owns the Stark Street property.

That property won’t be vacant long, Schrott said. The company already has an understanding with a new tenant.

“We never had to put a sign up,” he said.

Schrott said it’s too early to publicly identify the incoming tenant for the 2,400-square-foot store. But some things don’t change much – it’ll be an apparel retailer.

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