In an article published on June 1, 2022 in Multi-Housing News, Marni Ahram discusses how turning unused office space into multifamily space requires in-depth knowledge of conversions, market dynamics and finance.
“Office building tenants have been renegotiating their leases, forcing some owners to seek mortgage loan modifications,” explains Ahram. “The current reality is that office vacancy rates in major U.S. cities are at the highest levels in a generation, and the general sense of the urban commercial real estate pundits is that the younger generation of office workers will never be the five-day-a-week office workers their parents have been.”
Ahram further discusses that many building owners, particularly those in urban areas, are repositioning their office buildings for alternative use. “The most extreme repositioning, short of demolition, is adaptive reuse involving the gutting and reconstruction of office buildings, leaving the building shell and accessways but retooling the interiors for industrial, warehouse or residential use,” said Ahram.
She concludes by saying, “if an office building owner determines that a residential conversion will be the highest, best use of the building, then it is strongly recommended that they partner with a developer, or retain team members, who are experienced in urban residential conversions.”
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