With more and more people working from home, there are many vacant offices and even entire buildings. Old office buildings can often be purchased at a significant discount and may be attractive to developers. The question is what to do with them since the demand for their original purpose has diminished.
The need for housing has not decreased and in fact, has increased. Converting office buildings to apartment buildings can be an excellent way to earn a profit. Not all old office spaces are suitable for housing but there is a sweet spot of features that developers should look for when purchasing an office building with an eye toward conversion to an apartment building.
Less Than Ideal Candidates
Developers like Angelo Ingrassia Rochester NY have successfully converted office buildings into apartments and student housing. The key is finding a building that is well-suited for conversion.
Many old office buildings are too large or too technically complicated to convert to housing. Another problem is buildings that are too close to their neighboring structures, cutting off sufficient ventilation and light from windows.
The “Goldilocks” category of buildings, or those that are just right, generally includes moderately-sized, midrise buildings that were constructed before World War II. They should also front open areas on at least two sides and be located in a neighborhood in proximity to, but not in, the dense financial center of the city.
Buildings that are 4-5 stories tall with operating windows are ideal for apartment conversion. They blend into the surrounding neighborhood without towering over it. This gives them great appeal to people looking for housing.
Locating the Goldilocks Zone
Most cities have neighborhoods that have several worthy candidates for housing conversion. These areas are the “Goldilocks zones”. A savvy developer or architect will conduct thorough research and utilize the help of commercial real estate agents to find these sections of their city.
The lower demand for office spaces has dropped the price of many buildings in these ideal neighborhoods. With a careful search and a little patience, developers can find a bargain that will reap healthy profit margins.
Challenges of Converting Office Buildings to Housing
Obviously, a building designed for offices is significantly different than one intended for residences. One challenge is that office buildings often have multiple elevators while apartment buildings usually need just one. Removing unnecessary elevator shafts can be expensive and may require creative solutions.
The large floor areas of office buildings must be cut down. Some developers have done this by cutting in courtyards. In addition to reduced floor space, they offer more natural light and fresh air to apartments as well as outdoor space that the residents can enjoy.
Older buildings need upgrades to the mechanical and electrical systems to allow for air conditioning and appliances. The conversion process is expensive but when done correctly, it can pay off nicely.
Many cities have old office buildings that are vacant and can be purchased at a good price. Converting them into housing can be a highly profitable venture for a developer.