Poll Results: Office-to-Residential Conversions

In Commercial Property Executive’s most recent monthly reader poll, respondents were asked about the extent to which their firms may be considering conversions of office space to residential properties.

At a time when office conversions have more than doubled over projects from the last seven years, such undertakings appear to be the result of incentives from state and local governments. As such, the scale and locations of these conversions may differ drastically. Some cities such as New York have made changes to zoning laws, or have offered some form of tax credits or subsidies to willing developers.

READ ALSO: The Tricky Task of Office-to-Residential Conversions

As a result, nearly two-thirds of respondents, 63 percent, stated that the conversions are not feasible, likely owing to both a lack of legislative or monetary incentives, as well as to many inherent structural difficulties. For instance, many high-rise office properties have floorplans, window arrangements and plumbing and HVAC structures that would make for less-than-ideal living conditions, as well as prohibitive contracting costs. Some conversions run as high as $500 to $600 per square foot, according to Cushman & Wakefield.

Still, a quarter of respondents stated that they have one or more projects in the process, with the remaining 13 percent answering that they are seriously considering them. Given both the severe shortage of affordable housing and the nation’s high office vacancy rates, such projects are becoming more worthwhile, with or without government incentives.

Click here to see CPE’s latest poll, and the results of previous surveys.