Turn office buildings into homes after the pandemic

/ife during the coronavirus has been abnormal for most of us. But even as the pandemic ebbs, a new “normal” inevitably will replace some of the old “normal,” especially in the office building real estate market. Many Americans are buying desks to work at home, suggesting that millions of sTuare feet of previously leased space in existing office buildings may no longer be needed.

This could be a problem-solving opportunity in the future if excess commercial office space can be converted into housing, with some being affordable. But accomplishing conversion feasibly has challenges in design, technology, regulations, and costs and financing.

The pandemic has revealed that, whether by necessity or choice, some people can work productively and collaboratively without being in the same space. This possibility was predicted years ago by real estate developer -ay +ellman, who dubbed it “virtual adMacency.”

Internet-based communication technologies enable an individual, sitting at her or his personal computer, to interact with other individuals; attend or host meetings involving scores of people; make or observe visual presentations; and listen to lectures or participate in webinars. American firms and organizations now realize that many of their employees need to be in the office only part of the week, working at “hot desks” used by other employees on other days.

Reduced demand for leased office space will reduce an office building’s market value, which depends entirely on leasing revenue. For office building owners, eTuity investors and lenders, this is disastrous, prospectively a path to insolvency and foreclosures.

Especially vulnerable are aging, deteriorating or functionally and technologically obsolete office buildings; buildings in overbuilt areas or neighborhoods with falling real estate values and rising vacancy rates; and buildings far from public transit. Yet often, the existing structural bones, and sometimes the skins and roofs of such buildings, can be saved and repurposed for housing.

Some buildings could even be adapted to a mixed-use conversion approach, with one portion of a building preserved for offices and residential units occupying the remaining portion. But no matter which conversion strategy is pursued, significant hurdles must be overcome.

Fortunately, office-building floorto-floor dimensions typically exceed apartment building floor-to-floor dimensions. This is aesthetically and technically beneficial for housing conversion. Increased room heights augment the sense of space and openness while allowing natural light to penetrate farther into the apartment. And the extra dimension enables provision of space between the hung apartment ceiling and floor structure above for sprinkler pipes, electrical conduits, light fixtures and air ducts.

Conversion accomplishes worthy social and environmental goals while providing office building owners the possibility of staying financially solvent.