As workplace technology and space needs continue to change, traditional office tenants are increasingly harder to come by. At the same time, people who have opted out of commuting from the suburbs to enjoy a more urban existence closer to central business districts are finding affordable housing choices ever more challenging. These forces, among many others, are leading owners of older office buildings to look at ways to adapt their properties to residential and other uses. Doing so not only benefits the owner’s bottom line, but also comes with the green benefits of reducing construction waste and avoiding energy-intensive new construction.

Local governments, recognizing the economic benefits of reducing office vacancy rates while invigorating formerly sleepy office-only enclaves, have been doing their part to facilitate office conversions. Fairfax County, Virginia, recently adopted a new policy to allow office conversions to occur under appropriate circumstances without the need for lengthy and costly amendments to the County’s comprehensive plan. Legislation is also pending in the District of Columbia that would provide tax abasement incentives for office-to-residential conversions in certain parts of the District.

Interesting examples of office conversions around the country include:

  • Lofts within a former office building in Alexandria, Virginia, that can be used as a home, office, or both;
  • 223 apartments in a 21-story office building in downtown Cleveland;
  • Micro-unit apartments with large common areas in Arlington, Virginia;
  • Conversion of a 1915 office building in Detroit into a mixed-use facility with apartments, a hotel, and ground-floor retail; and
  • An elementary school in Falls Church, Virginia.

Of course, the trend can also work in reverse, albeit less frequently, with building conversions to office from some other use. In Los Angeles, for example, a 93-year-old industrial building known as the Harris Building, used for garment manufacturing for decades, was converted to creative office uses.

There are challenges that make such conversions of certain office buildings to other uses difficult. Chief among these challenges is layout. Many vacant office buildings were built in the era of the cubicle, massive file storage areas, and air conditioning. These factors created little need for window access, so deep floorplates were the natural result. Carving up such large interior spaces into individual apartments is problematic, since building codes require that residential units have windows. Another challenge for conversion is location, since an office building to be converted into an apartment building has to attract people who would want to live there. An office building hemmed in by highways or surrounded by seas of surface parking and no amenities will therefore not be a good conversion candidate. Price is also a critical factor for making the project economics work, since office rents usually far exceed residential rents.

Despite the challenges, office conversions will likely continue for some time to come. Conversions are possible even among buildings that may not be the best candidates because of deep floorplates, thanks to innovative solutions such as interior courtyards, interior common areas, and other nonresidential uses in the center of the building. Whatever creative architects and engineers can dream up will continue to influence the potential reimagination of urban building spaces, especially in those areas confronting a shrinking affordable housing stock. Real estate lawyers and urban planners will have to be part of this creative effort, finding ways to amend building codes or flexibility in existing laws. The ongoing evolution in how we all live and work, together with ever-changing urban economics, could very well accelerate and broaden this trend in coming years.