| |
 |
| |
 |
| |
| 08/23/2024 In this edition of MarketRent™ powered by Clarendon, we explore the impact of remote work on commercial real estate and the growing trend of converting vacant office spaces into residential units. Cities like New York, Los Angeles, and Cleveland have led the way in these conversions, revitalizing urban centers and creating vibrant communities. Despite their potential, these conversions face challenges like zoning restrictions and high costs. Our latest tools and visualizations provide insights into how adaptive reuse can address both office vacancies and housing shortages, playing a crucial role in reshaping urban landscapes. |
| |
| INSIGHTS The Rise of Office-to-Residential Conversions: A Nationwide Trend |
 |
| The COVID-19 pandemic has led to a surge in converting vacant office spaces into residential properties, especially in cities like New York, Los Angeles, and Cleveland. While this adaptive reuse strategy helps address urban housing shortages and revitalizes underutilized areas, it faces challenges like high conversion costs, zoning restrictions, and the need for high residential rents. Municipal incentives and federal programs aim to make these projects feasible, but they currently account for only a small percentage of new housing units. Despite limitations, office-to-residential conversions are becoming a key part of efforts to rejuvenate urban center |
|
| |
 |
| |
| INSIGHTS The Conversion Equation: Identifying Office Buildings Suitable for Housing |
 |
| Converting underutilized office buildings into residential spaces is an emerging solution in U.S. cities to address rising housing demand. A National Bureau of Economic Research (NBER) study found that 11% of office buildings in major cities could be converted, adding up to 400,000 new apartments. Key factors for successful conversions include market demand, building class and location, structural suitability, and supportive zoning regulations. Class B and C office buildings, particularly in downtown areas, are ideal candidates. The trend offers a sustainable way to address housing shortages and revitalize urban spaces. |
|
| |
| DATA Mapping the Shift: Where Offices Are Becoming Homes |
 |
| Developers in the U.S. are increasingly converting underused office spaces into residential apartments, transforming urban office districts into mixed-use communities. In Q1 2024, nearly 70 million square feet of office space was being converted, with over 60% focused on multifamily residences. Cities like Cleveland, Houston, and Philadelphia are leading this trend, driven by high vacancy rates and aging buildings. Despite challenges like high conversion costs, growing government support is propelling this movement, offering a solution for revitalizing downtowns and addressing the housing shortage. |
|
| |
|
| |
| PULSE What We're Reading |
|
| |
 |
| Comprehensive, Data-Driven Insights Analyses and Reports in Major Markets Nationwide |
| CONNECT WITH US |
|
| |
| All content is provided herein “as is” and neither Clarendon Valuation Advisors, LLC (“the Company”) nor its affiliated or related entities, nor any person involved in the creation, production and distribution of the content make any warranties, express or implied. The Company does not make any representations regarding the reliability, usefulness, completeness, accuracy, currency nor represent that use of any information provided herein would not infringe on other third party rights. The Company shall not be liable for any direct, indirect or consequential damages to the reader or a third party arising from the use of the information contained herein . © Copyright MarketRent™ | Clarendon. All Rights Reserved. |
| |
