Most office buildings are not architecturally feasible to convert to residential. In fact, because of zoning laws, many/most can't even be converted.
Would you live in an apartment 15 feet wide and 50 feet deep? No. That's why most office buildings dont work
You have to redo all the mechanical, plumbing, electric, and then entirely refinish the building. Its literally cheaper to build new than deal with the nightmare that is to convert an office.
I work in CRE - every single office to multi deal i have seen the developer has war stories. And the units are 40-100% more expensive in cost than other apartments.
Office buildings are like an infectious disease. You could let them die. But if you have an urban infill city environment and more and more office properties become ghost buildings, then that disease will spread. All of the restaurants and other businesses nearby that rely on the foot traffic from office folk, they will die. You will see more riff raff. More homeless. More crime.
Many office assets need to go to 0 in asset value before the private market is willing to take the risk of those conversions.
Remember, loans are close to 10% for construction. And equity returns are higher.
> Would you live in an apartment 15 feet wide and 50 feet deep?
Yes, if that's the alternative to being enslaved for life. How can people still not understand that there is a massive part of the population who need to be able to purchase their living space to not have to rent for life or take on life-long debt that they can't afford. How can people not understand this? Yes, it's better for a young worker to be able to purchase a shit apartment that is a converted office building and start building his or her future, than pay rent for years and years and have nothing to show for it.
This is a true "let them eat cake" situation. Imagine if we didn't allow people to eat because we didn't think the food was good enough. That's what's happening with housing.
I definitely agree about this ownership vs rental dynamic and my first property was a long and narrow townhouse with 1 wall of windows and a couple of tiny ones on the other side (probably closer to more 25 x 75). My concern with these conversion proposals is that they will only be for rent and not ownership and that they will be priced the same as everything else…too damn high.
It’s probably cheaper just to allow new construction. Boston has plenty of underdeveloped land that could be converted to multistory residential, but the city’s zoning laws forbid most new residential construction.
>Would you live in an apartment 15 feet wide and 50 feet deep?
For laughs, I just measured the width of my home's hallways and rooms. I don't see why 15x50 feet apartment isn't doable especially for a bachelor/new couple starting out. Assume an apartment with a 3 foot wide, 50 foot length hallway, subtract another 2 feet width for walls/piping/whatever, and then you can hang 5 rooms that are 10x10 feet from the hallway. Enough for a living room/common area/kitchen/2 bedrooms. Might get a bit cramped but very usable.
I assume I'm missing something here since this doesn't seem to be too bad.
All of your windows are on one of the 15 ft walls. You would need to have the lights on all day in many of the rooms, no opening a window for fresh air, limited escape options in case of emergency. Perhaps some of these concerns should be weighed against the reality of housing shortage and homelessness, but ample windows throughout is the standard for residential today. That’s why modern office tower conversion involves cutting the center out for a light shaft.
Would you live in an apartment 15 feet wide and 50 feet deep? No. That's why most office buildings dont work
You have to redo all the mechanical, plumbing, electric, and then entirely refinish the building. Its literally cheaper to build new than deal with the nightmare that is to convert an office.
I work in CRE - every single office to multi deal i have seen the developer has war stories. And the units are 40-100% more expensive in cost than other apartments.
Office buildings are like an infectious disease. You could let them die. But if you have an urban infill city environment and more and more office properties become ghost buildings, then that disease will spread. All of the restaurants and other businesses nearby that rely on the foot traffic from office folk, they will die. You will see more riff raff. More homeless. More crime.
Many office assets need to go to 0 in asset value before the private market is willing to take the risk of those conversions.
Remember, loans are close to 10% for construction. And equity returns are higher.