How Multifamily Housing Conversion Helps Maximize Real Estate Value
As the demand for housing soars and vacancy for office remains high, our clients are seeking new ways to make the most out of their real estate investments. With the focus shifting away from office space, our team is creating new life in these spaces through reimagined layouts and thoughtful conversion concepts. Our award-winning expertise in multifamily, mixed-use and hospitality developments across the Americas, is a driving force of innovation in the office to multifamily housing conversion trend. However, a comprehensive analysis is critical to determine project scope, risks, and cost estimates before deciding if it is an optimal fit.
Why Convert Office to Multifamily?
Greater access to multifamily housing helps our community in two vital ways – we are able to alleviate a growing housing shortage and keep unleased office spaces occupied and thriving. As many companies shift to hybrid or fully remote work options, office building vacancies continue to rise. However, this surplus of large commercial property offers a new opportunity for more intuitive types of living spaces. Multifamily housing concepts allow tenants to live in walkable downtown areas with easy connection to public transportation. The need for more walkable communities is also supported by the fact that residents with hybrid roles are craving more dynamic places to live and work. This includes newer properties with a variety of modern, wellness-focused amenities. More than ever, residents and developers alike are seeking options that provide greater flexibility and more convenience to maximize their real estate investment.
When evaluating a property for a potential multifamily conversion there are several key zoning elements to consider. Most critically, it needs to be established if the property has already been zoned for residential use. After meeting the correct zoning requirements, we can begin exploring if there are other incentives available, such as tax incentives in the area or density bonuses. Another element of zoning that can assist in the building process is incorporating affordable housing units into your multifamily property. Legislation supporting affordable units can offer a faster path to project approval which can mitigate the risk of conversion or investment cost in context of vacancy loss, while most importantly, providing more housing opportunities to people in the area. We also evaluate the presence and potential of key amenities, particularly parking options, and prospective civil engineering needs. Our team often finds that there are modifications required to meet residential needs. This could include a new stormwater management plan, sewage connection or accommodations for accessibility.
While these considerations are at the forefront of the evaluation process, multifamily housing conversion can vary greatly from one project to the next. Other factors we consider are the age and condition of a property. Building age not only has implications on the overall conditions of the property, structure, and systems, but it also can affect the floorplate configuration and facade conditions. Older buildings may also require significant upgrades to potentially outdated fire and life safety systems.
It’s also important to recognize that not every building may offer the necessary retrofit opportunity and floorplate layout for residential units or common amenities such as a pool, a fitness center or a media center. Besides the fit-out of units and redistribution, a retrofit of the backbone and main equipment of mechanical electrical and plumbing systems will be necessary. Sewage connection, electrical and water services, should also be evaluated when determining if the property is an ideal fit for residential use. In seismic areas a retrofit might be necessary. Determining the extent of façade repairs and/or replacement needs largely affects investment and floorplate optimization opportunities.
When converting office to residential spaces, there are several vital design elements that help the project transform into a cohesive living experience. As a team, we aim to create a comfortable home, through functional features and aesthetic-focused amenities. Design elements that help reiterate the home experience can include creating curated outdoor amenities, providing more intuitive common spaces, or highlighting unique existing building features.
Through tools like our test-fit technology and an integrated team approach, our experienced team can seamlessly and quickly provide high-quality planning and design services across multiple disciplines to meet the unique requirements of each project. Despite the customization required, we see the unlimited potential for conversions to create thriving new spaces that maximize our client’s real estate value and meet the needs of the world’s fastest growing cities.
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