How Easy Is it to Repurpose Offices into Apartments?

Adaptive reuse is a hot concept, but regulatory and financial hurdles have made it slow to catch on in practice.

April 28, 2021, 11:00 AM PDT

By Diana Ionescu @aworkoffiction

Downtown Detroit

djtansey / Flickr

With many companies offering their employees long-term remote work and ending their leases on large urban office buildings, the future of business districts may lie in adaptive reuse, writes Henry Grabar in Slate. "Many business districts face the highest vacancy rates in decades, and a hundred million square feet of new supply from the pre-pandemic cycle is still coming online each quarter."

"There’s ample precedent for adaptive reuse as an engine of urban revitalization. Light industrial buildings in New York City’s Cast Iron Historic District (today’s SoHo) were converted into live-work lofts starting in the 1960s. The rich stock of 20th century office buildings in Chicago and Los Angeles have been converted into apartments. New England mills have been appropriated as hotels and museums."

Adaptive reuse is "one of the greenest constructions you can do," says Scott Maenpaa, a project manager at Boston-based the Architectural Team, and can be 20 to 30 percent cheaper than new construction, but conversions across the country have been relatively slow. Long-term leases, in many cases ten years or more, are creating a lag in office building vacancy, and a complicated legal landscape makes the process difficult and expensive. So far, "office owners by and large aren’t yet trying to unload their buildings at conversion-friendly prices."

"'The current controls in place make it really difficult to be able to convert from office or hotel to residential,' said Sheila Pozon, a land use lawyer at Kramer Levin." Cities like Dallas and Baltimore "did not see significant conversion of older offices until they offered sizable tax breaks," indicating that, while adaptive reuse seems "a bigger trend will require a push."

Tuesday, April 20, 2021 in Slate

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