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Vacant office buildings can be found in nearly every metro area large and small, with some larger markets like New York City and San Francisco experiencing double-digit increases in vacancy rates compared to pre-pandemic numbers. Simultaneously, many of these same markets have the greatest need for new housing. For example, while NYC’s Midtown South, Downtown and Midtown neighborhoods ranged from a 10.4 to 14.2 percentage point increase in office vacancies from April 2019 to Jan. 2023, the same area needs approximately 10,000 new units a year to adequately house its population.
To help address these conflicting situations, the federal government in Oct. 2023 announced $45 billion in assistance for commercial real estate owners and developers to convert office space into residential units. From below-market-rate loans to 1031 exchanges, there’s ample reason to examine the feasibility of residential use for your existing commercial space.
The best place to start? Due diligence. The first step in office to residential conversion planning is to consider the myriad of elements that must come together to create a code-compliant, home-like environment. Take the short quiz below to test your understanding of how basic building logistics like waste and recycling may impact your commercial to residential conversion.
If you answered 2 or 3 to any of the above, it’s time to contact Lerch Bates. Our team of technical experts can help you gauge feasibility for any building conversion. And, with a multidisciplinary approach other firms can’t provide, your LB report will evaluate every building element that impacts tenant satisfaction simultaneously to ensure the entire building will be optimized.
Ready to learn more? Register for our webinar Feb. 15 to hear firsthand from our multidisciplinary team.