An Empty Office Is Not an Apartment Building
Turning empty offices into housing sounds almost perfect.
Cities have offices they no longer need. Many of the same cities need more homes. On paper, changing one into the other looks obvious.
The problem is the building itself.
Gensler has studied more than 1,300 possible office conversions and found that only about 25% were strong candidates. Floor depth, windows, pipes, ceiling height, stairs, and the building’s shape can all decide whether the deal works.
The Floor Plate Is Often the First Test
An apartment needs light and windows.
Many modern offices were built with very deep floors because desks could sit far from the glass. A home does not work the same way.
If the middle of the floor sits too far from a window, a builder may need to cut out part of the building or create a new light well. That can add a huge amount of cost.
Older offices can sometimes work better because they have thinner floor plates and smaller window bays.
This is why the ugliest old office on the block can sometimes be a better conversion candidate than a newer tower.
Elon Musk is on record predicting this new opportunity is set to be 180 times bigger than the SpaceX IPO.
That IPO minted 4,400 millionaires overnight.
If this is 180 times bigger…
Just imagine how many more Americans will become millionaires.
Will you be one of them?
Plumbing Can Kill the Deal Too
Offices have far fewer kitchens and bathrooms than apartments.
A 20-story office may have a few restrooms on each floor. A housing project may need dozens of kitchens and bathrooms on every floor.
That means new pipes, drains, and shafts must be added through the building.
If the structure does not leave room for them, the cost can rise fast.
This is why conversion deals need deep design work before a buyer pays for the property.
Policy Is Helping, But It Cannot Fix Bad Bones
New York has made more buildings legal to convert through its City of Yes changes. The rules expanded the pool of older office and other business buildings that can become housing.
That can remove one large roadblock, but zoning cannot make a deep floor plate shallow. It cannot move the building core or add windows without major work.
The best conversion deals need both good rules and a building that fits.
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Ignore this at your own peril
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This has nothing to do with SpaceX…
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Already, some of the biggest tech investors like Elon Musk, Mark Zuckerberg, Cathie Wood, and Bill Gates are moving money into it.
Just to name a few…
But you won’t hear anything about it in the mainstream news…
In fact, TV pundits spent most of this past year talking about AI worries and its “existential risk” to jobs…
Or arguing whether we’re in an AI bubble and when it would pop…
That’s why most Americans won’t see it coming until it’s too late.
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By the Numbers
Gensler found only about 25% of more than 1,300 studied buildings were good conversion candidates. CBRE estimates office conversions have already created roughly 33,000 apartments and condos since 2016, with another 43,500 units in its pipeline.
Bottom Line
Office-to-home conversion is real, but it is not a simple fix for empty towers.
The winners are not the buildings with the most vacant space. They are the ones with the right windows, floor depth, pipes, price, and rules.
