Does anyone have experience pulling this off lately? Search function sucks.
What I'm seeing is that there is difficulty getting over: 1) windows, and window placement, especially in urban-ish locations, where offices are no longer needed to the degree they were in the 80's, but the window looks at the neighboring office 2 feet away, or a parking garage.. Also, there is risk your neighbor demolishes, goes vertical, and now you have a 20 foot tower next to your conversion.
2) Parking.
Of course before the convo even begins you need to make sure the actual floor plates are conducive to resi. and the city/muni are on board.
Any other major points to consider, or stories of your group pulling this off?
Plumbing. The amount of plumbing you will need to go from a few bathrooms and kitchens on each floor to every unit spread around the floor is significant and will be very expensive.
This is what im talking about.
So you have done this before? Went well? bad? so so?...
No, but I saw the head of Hines Conceptual Construction department give a talk on the future of office. He said plumbing was one of the biggest issues with converting traditional office to residential.
They are working on designing new office buildings in a way that will allow cheaper and easier conversions down the road.
This isn't as big of a deal as you may think. Most people know what they're getting into with urban living and you can always provide blinds, charge less (aka charge people with good views more), or install a wine fridge to make up for it in those units.
Have looked at this on several deals. Key issues are:
-depth of floor plate. frequently too much to accommodate double loaded resi concept. -plumbing stacks ($$) -HVAC infrastructure--central plant retrofit for sub-metering, venting ($$) -utility infrastructure retrofit--low voltage capacity/transformer upgrade ($$) -venting--resi toilet/hood exhaust (new shafts) ($$) -sightlines/proximity to adjacent buildings (managing privacy)
Codes typically require exterior windows for BRs (for fire escape purposes) and a double -loaded corridor will make a lot of office floor plates difficult to convert into residential units.
I have recently seen a project that took an extremely large floor plate and cut holes in the middle and made an atrium.
I suppose you could blow the roof off and make an exterior courtyard work potentially as well.
Perhaps you could make wrap style building with single-loaded corridors as well....it would all boil down to a specific building's layout/dimensions and buying it at the right price to make it work.
We've got an office building in Arlington, VA built in the late 1960's. We looked into converting this office building to residential and we were priced out a conversion cost of $250 psf. So if you own the land already or have a low cost basis it could be a pretty solid investment. We own the land outright but decided against the conversion when we put the land in at "market value"--return on real equity was poor, but that was a function of the rental market, not so much a function of terrible costs.
(We're now actively looking at a self-storage conversion because THOSE returns are siiiiiiick. Main hang-up is convincing the county to go along with the exception since the zoning ordinance goes out of its way to specifically condemn self-storage developments on this site.)
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