The restrictions due to the COVID-19 pandemic have meant that office occupancy rates have not yet fully recovered, since remote work is still an option for many companies.
For this reason, a growing number of cities and states have begun to look for ways to transform those empty office buildings into residential unitsa solution that could help combat the housing shortage.
Data from commercial real estate giant CBRE revealed that lhe national office vacancy rate reached 17.3% in the fourth quarter of last year.
To attack the problem, in New York City Mayor Eric Adams unveiled plans in January to convert some outdated office buildings into new apartments to help the affordable housing shortage in the Big Apple.
The strategy includes specific proposals to ease zoning restrictions and offer tax credits to homeowners. The plan could add up to 20,000 new apartments over the next decade.
Washington DC led the number of buildings repurposed during the pandemic, according to a report compiled by RentCafe’s research team.
Along with Philadelphia and Chicago, these three major cities accounted for 15% of total apartment conversions nationwide.
The number of office-to-apartment conversions in the US is expected to triple this year, from 11 to 34 by 2022. But those projects alone will not significantly alter the surplus supply of office space.
When taking into account all projects from 2016 to 2022, as well as upcoming and ongoing proposals, office conversions cover less than 2% of office stock, Morin said.
The 89 completed home conversions that CBRE has tracked since 2016 have totaled more than 14,000 apartment units.
The main advantage for developers of reusing old buildings and turning them into residences is the speed of construction. Sometimes, developers can also save themselves from demolishing a building and start from scratch.
Meanwhile, the adaptive reuse of older office buildings is not always an easy route and has led some architects to use a compatibility assessment scorecard as a method of evaluating properties.
And for buildings that get an architect’s stamp of approval for conversion, repairs can come at a high price.
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Source: La Opinion