RCLCO Real Estate Consulting reposted this
Office to Multifamily Conversions and Redevelopment Opportunities: Despite the challenges, there continues to be substantial interest in converting commercial properties to residential units, due in part to high vacancy rates in older office buildings, and strong long-term demand for rental housing. Weak commercial demand compared to much stronger long term multifamily demand make conversions economically viable, though they are challenged with historically high new multifamily deliveries, slowing rent growth in the short term, and high interest rates. While the market opportunity is strong, adaptive reuse projects face specific design and regulatory challenges, including updating building systems and meeting current code standards. Policy changes that support conversion efforts, such as zoning adjustments and tax incentives, are needed at both the local and state levels. This is happening in some jurisdictions - for example, Los Angeles and New York City have enacted measures to promote conversions, but more is needed in other regions. Although there is great potential, large-scale conversion activity is constrained in some markets by regulatory barriers. The level of future conversion activity will depend in part on policy reforms, market incentives, and improving market dynamics over the next several years. #RCLCO #multifamily #officeconversions