National CRE News In Your Inbox.
Sign up for Connect emails to stay informed with CRE stories that are 150 words or less.
Office Conversions Finally Gain Momentum
With the cost of acquiring an office building to convert to residential use often too high to make the economics pencil out, few such conversion projects have moved forward. That is now changing, the Wall Street Journal reported.
“Now that office vacancy has reached record levels, sellers are willing to take what they can,” reported the WSJ. “That has caused values to plunge for nothing-special buildings in second-rate locations, making the numbers on many of those properties now viable for conversions.”
Year to date, 73 U.S. conversion projects have been completed this year, up slightly from 63 in 2023, the WSJ reported, citing CBRE data. However, another 309 projects are planned or underway, with about three-quarters of them office to residential. In all, about 38,000 units are in the works, according to CBRE.
“The pipeline keeps replenishing itself,” Julie Whelan, CBRE’s global head of occupier thought leadership, told the WSJ.
Pictured: GFP Real Estate and Metro Lofts’ 25 Water St. in Lower Manhattan, an office-to-residential conversion spanning more than 1,300 units.
- ◦Sale/Acquisition
- ◦Development
