If we convert empty offices into housing, can we save downtowns? [Midweek Vibe]


Approximately 24% of US office buildings are projected to sit empty by 2026 as remote work remains prevalent, resulting in a potential $250 billion decline in commercial property values.

However, the trend of shrinking downtown areas predates the pandemic.

In 2019, the architectural firm Gensler devised an algorithm to identify underutilized office spaces suitable for conversion into residential units.

Their focus was primarily on cities left reeling from the departure of major industries, such as the auto industry in Detroit or the oil sector in Calgary.

The algorithm, as explained by Steven Paynter, Gensler's leader in building transformation and adaptive reuse, swiftly analyzes a building's data and compares it to an optimal residential structure in the same vicinity to gauge its viability.

They often encounter "Class B" buildings - neither top-tier nor budget-friendly, making their revival uncertain.

A critical factor in suitability is the distance between elevators and windows, with an ideal spacing of around 35 feet to accommodate 30-foot-deep units.

Not all buildings are prime candidates for conversion:

  • The current US office vacancy rate stands at 20%.
  • While around 30%- 35% of office properties can be repurposed, Gensler's assessment states that only 10% would induce adequate demand to bolster the remaining offices.

The appeal lies in the flexibility of office buildings, with their open layouts enabling developers to incorporate ground-floor businesses and fostering vibrant neighborhoods.

Moreover, these conversions prevent demolitions, thus avoiding community resistance typically faced by new construction projects.

This approach retains approximately 90% of existing concrete, a significant move towards sustainability since concrete contributes 8% of global carbon emissions, surpassing the airline industry's impact fourfold.

As of October 2023, the Flatiron Building in New York City is being converted into luxury apartments and condos.

The unique triangular structure — sandwiched between 5th Avenue and Broadway and 22nd and 23rd streets — will be transformed into about 40 condos or rental units with retail remaining on the ground floor.

The new Flat Iron residents can move in sometime in 2026.

According to CNBC, Washington DC is currently leading the movement (by number of units).

A notable example is the office-turned-apartment building The Wray, which the State Department occupied since the beginning of World War II.

Could this strategy alleviate the housing crisis?

Perhaps. But why are only 5% of Gensler's identified potential conversions currently being converted?

Gensler identified over 130 million square feet of potentially viable office conversions in major US cities. This includes government-owned properties such as post offices, courthouses, and federal buildings.

Maybe it's going to take incentives from local or federal authorities to facilitate affordable housing initiatives.

The White House does have a 54-page guidebook to such funding if you’re interested in some light bedtime reading.

Have a triumphant rest of your week,
The A-Team

P.S. - Remember to vote for the Global Choice at ResidentialDesignAwards.com and to register to attend the Design & Build San Antonio Conference.

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