Is Office to Residential Within Our Grasp?
If there is one thang that most folks in the real estate business and those looking to buy or rent real estate can agree on is this; there's just not enough of it out there! Since the early days of the pandemic and the times when office buildings large and small were closed "until further notice" people have been transitioning and began the trend of working from home. Ironically, this practice and the additional desire to flee crowded urban centers led to an unprecedented sellers' market where rules were all but abandoned.
As we enter 2023 it remains clear that many of these once teeming office complexes will not return to their familiar past and remain underutilized in good scenarios, and nearly dark space in many others. The obvious thought shared by many is one that we believe should be pursued, but sadly seems to be out of reach, at least for now anyway. The idea to which we are referring is the conversion of office to residential, which is not an entirely new idea, but obviously became a talking point during and especially after the covid era. The bottom line is that there are too many hurdles for this to make a significant dent in housing inventory and availability anytime soon. In fact, since 2016 only a miniscule 2% of office space has been converted to residential use (apartments, condos, etc.), and that figure INCLUDES plans in place for future conversions extending through 2025, according to Stijn Van Nieuwerburgh, a professor at Columbia University who recently ended his tenure as president of to the American Real Estate and Urban Economics Association.
In many cases it comes down to zoning and land use, which is a hurdle that could become easier to overcome as local, city, and even State governments may be willing to show more flexibility going forward. Even if that occurs, the primary obstacle, as it usually is boils down to money and finance. In most cases, the design of office buildings is not conducive to residential conversion, save for the older, and in many cases smaller complexes with bones more adept for conversion that have been vacant for a while and the landlord could be more inclined to sell at a lower price. While it's not feasible in short order, considering the amount of space in question nationwide that could be available for such re-purposing, it remains an option worth continued study and effort.
As one of our guiding principles here at PropertyGuerilla.com, we firmly believe that "outside the box" thinking is one of the most important things that's going to help sustain and subsequently grow the real estate industry indefinitely, and this is just one example of how!