The concept of office-to-residential conversion appears to have caught on with foreign investors in U.S. commercial real estate, according to AFIRE’s latest International Investor Survey Report. Nine in 10 anticipate converting existing office properties to residential in the next five years.  

In addition, survey respondents believe that more than a third of office assets within their U.S. portfolios will require upgrading to meet future occupancy demands for enhanced health, sustainability and work style amenities. Investors are also increasingly considering a variety of office transitions to other uses, including industrial storage/data center (72% of respondents), hospitality/leisure (69%) and vertical farming (33%). 

“This AFIRE Survey Pulse captures institutional investor sentiment from around the world toward the U.S. market in late 2023,” said Gunnar Branson, CEO of AFIRE. “While significant uncertainties persist, institutional investors, who benefit from a long-term horizon, see opportunity to realign their portfolios to meet the shift in asset class demands, in particular towards the continued need for a greater volume of residential properties in U.S. cities.” 

For up-to-the-minute insights on the state of the market and what’s next in the current cycle, be sure to attend Connect Investment & Finance 2023 on Oct. 24 at the Hyatt Regency O’Hare in Rosemont, IL. Click here to register.