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The challenges and feasibility of converting office buildings into apartments.

Elina Thapa
December 18, 2023

Office-to-Residential Conversions: Why So Complex?

Many people have settled into a work-from-home culture with little or no intention of returning to their offices, and more and more companies and government agencies are considering the conversion to remote work. The trend has led to a rise in vacant office buildings that run the risk of going obsolete, while the post-pandemic world has also seen a significant jump in housing prices leading to housing shortage. In this scenario, the question is clear: why not convert the empty office buildings into apartments? While this comes off as a perfect solution, there are multiple factors and several constraints to consider with such conversion projects.

Building Age and Zoning Regulation: The age of the office building is an important factor that helps decide whether it is suitable for renovation, conversion or demolition. Usually renovation/repairs are preferred for newer buildings that require some updates and demolition is chosen when the building is too old to bring up to the new building standards. Buildings that are neither too old nor new are best suited for conversion projects like these. Local building and zoning departments may have a cut-off age for permitting conversion of buildings - some jurisdictions require a building to be at least forty-five years or older for conversion. 

Acquiring permits for office-to-residential conversion can also be an arduous process with the major differences in residential and commercial zoning requirements. The residential area requires additional amenities like grocery stores, community parks etc. that are not typical of areas around office buildings. There may be opportunities (and advantages) to pursuing a mixed-use building in some cases.

Architecture: A livable apartment requires plenty of openings that allow natural sunlight and air to pass through the individual apartment units; however, most office buildings in major metropolitan cities are built in tight spaces that are often open only on two sides and they have a deep floor plan that allows very little natural light to pass through the central spaces. Hence converting such bulky buildings into housing facilities demands a major conversion including altering the shape of the entire building (alphabet shapes like H, O, C, etc. are common examples) to create hollow spaces through them that can accommodate plenty of openings in the central areas of the floorplans. Altering the structure of a building will require Structure Engineers to re-design the building with considerations for the change in dead load of the structure as well as live load of occupants for residential use. 

Building Code Requirements: Building codes adopted by the local jurisdiction govern all the modification a building undergoes during office to residential conversion, including structural changes and additions, insulation and energy requirements, plumbing and electrical needs, as well as fire safety requirements. Significant building code requirements to consider include:

  • The office buildings typically have centralized HVAC systems that handle larger spaces and prioritize air quality for higher occupancy size whereas residential buildings may have a split system or centralized HVAC with separate controls for each unit. 
  • Unlike office buildings, residential buildings will require a kitchen and bathroom in each unit. This alteration alone could significantly add to the cost and complexity of conversion projects.
  • Residential building may require a higher Sound Transmission Class (STC) rating for various wall assemblies for sound insulation between units to maintain comfort and privacy for occupants.
  • Usually, residential buildings don’t require a fire suppression system like office buildings, but each unit must have a means of egress to hallways, stairways, and common areas.
  • Selecting buildings with traditional wall and window assembly instead of the curtain wall façade will reduce the complexity of having to install windows compliant with moisture management practices, but there will often be a need to change fixed windows to operable ones.

Cost Benefit and Feasibility: The cost-benefit and feasibility of office-to-residential building projects depend on several factors including the incentives available, tax rate differential for office vs. residential building, owner’s mortgage status, market trends, rental value, etc. Normally the rental value per square foot of residential building is higher than that of office building. However, converting to residential could lose a significant area of rentable space, lowering the overall profits. 

Past statistics and future trends of housing shortages and office building vacancies in different locations should be carefully assessed. Some major cities are also looking to incentivize office to residential conversion which can improve the cost-benefit. With so many variables and requirements, thorough research and case-specific study is required before any developer takes on the project. 

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