The appeal of office-to-residential conversions lies in the ability to tap into cost savings by repurposing existing office buildings instead of constructing new developments from scratch. This financial viability is complemented by the concept of adaptive reuse, which aligns with sustainability values and waste reduction, appealing to developers and communities with a green vision of the future. Additionally, the prime location of office buildings in desirable urban areas offers convenient access to transportation, amenities, and job opportunities, making them attractive to both developers and tenants seeking a vibrant community.

According to a recent report from Cushman & Wakefield, nearly 20% of office spaces are currently empty across the United States. As the demand for office buildings has declined, one solution to these vacancies is repurposing them into housing. Within this context, we spoke with our colleagues at NELSON Worldwide to explore the goals, challenges, and overall impact of office conversions.

The Appeal of Offices: Unlocking Hidden Potential

“As real estate strategists, we meticulously explore diverse applications and aim to create spaces that cater to multiple generations. While it may seem straightforward to consider converting an office building into a residential space, the intricacies involved in formulating such a plan are far-reaching,” says Haril Pandya, Principal, National Practice Leader, Asset Strategy. “A holistic approach encompasses a commitment to sustainability by repurposing existing structures, either entirely or partially, which not only yields environmental benefits but also contributes to the overall well-being of communities.”

Office conversions appeal to developers, brokers, and tenants for several reasons, one of which is cost savings. Although office-to-residential conversion is not a new concept, what is new is the anticipated repricing of office buildings as many sit empty and depreciate in value. At the same time, residential construction costs are not going down, especially with the continued housing shortage. Therefore, transforming an existing office building into housing can be more economical compared to constructing a new building, making the project financially viable.

“Within Asset Strategy, a significant aspect of our role entails facilitating successful deals for brokers and collaborating with asset owners to unlock the true value of their portfolios,” says Allan Taylor, Principal, National Practice Leader, Asset Strategy. “Adopting this perspective is critical when considering conversion projects, as it allows us to identify and harness the hidden potential within these buildings. Our goal extends beyond community enrichment; we strive to reinvent these developments in a manner that serves both neighborhood and asset owner, ensuring a mutually beneficial outcome.”

In certain markets, there can be a high demand for housing, making conversion projects more attractive to developers and brokers. As the cost to build new residential buildings begins to exceed the cost of conversions, local governments and downtown districts across the country are altering their zoning and use regulations to make conversions easier to comply with, and this trend will only continue. Instead of constructing new buildings from scratch, converting existing office spaces into housing allows developers to meet the high demand more quickly and efficiently. This streamlined approach can save developers time and resources, making the conversion project more enticing.

Revitalizing Downtown Business Districts

Office-to-housing conversions play a critical role in revitalizing downtown central business districts, offering a multitude of benefits that contribute to their success. These conversions lead to increased foot traffic as office buildings are transformed into housing, attracting more residents to the area. With a higher population density, downtown districts experience a surge in pedestrian activity, stimulating the local economy and creating a vibrant atmosphere.

Converting an office building into housing can often result in an excessive amount of residential square footage. While this can be perceived as a benefit, it can actually be a challenge as this extra space might not translate into rentable space. To maximize return, it’s imperative to devise strategies for incorporating mixed-use elements into these conversions, such as integrating retail spaces, retaining some office areas, or introducing alternative components that offer significant community benefits.

By integrating a variety of amenities and services into one location, such as retail establishments, restaurants, and entertainment venues, these conversions foster a dynamic and inclusive urban environment. The availability of diverse offerings within walking distance further enhances the appeal of downtown areas, attracting both residents and visitors.

Preserving the historic character of downtown central business districts is another significant benefit of office-to-housing conversions. Many older office buildings possess historical significance and architectural value. By repurposing these structures into housing, developers contribute to the preservation of the area’s cultural identity. The adaptive reuse of these buildings not only breathes new life into the downtown landscape but also honors its rich heritage.

While older buildings often exude undeniable charm and curb appeal, it is important to approach each conversion with a keen awareness of the associated uncertainties. Factors such as egress, ventilation, and return on investment must be thoughtfully considered when embarking on the transformation journey. Particularly with buildings from the 70s, 80s, and 90s, classified within their respective architectural eras, the inherent challenges must be taken into consideration. Gaining a comprehensive understanding of these challenges is essential as we reinvent these historic buildings, ensuring their successful adaptation for contemporary use.

Building Micro-Campuses in Suburban Neighborhoods

Office-to-residential conversions have the potential to attract new businesses to the area, leading to the creation of new jobs and the overall stimulation of economic growth. As more people reside in these districts, the local economy thrives, creating a cycle of prosperity and opportunity.

As we embark on new development projects, it is crucial to recognize that the transformation of older projects does not necessitate complete demolition. Instead, it is imperative to envision the potential of revitalizing suburban office parks. With the shift of people from cities to suburbs following the impact of the COVID-19 pandemic, we witnessed a resurgence in these suburban areas. In response, communities began enhancing their appeal by introducing an array of amenities, such as retail spaces, coffee shops, and local attractions. Harnessing this momentum, we have the opportunity to convert once-dated suburban office parks into dynamic live-work-play environments that foster a sense of community and offer engaging experiences for residents to enjoy.

There is an opportunity to expand on vacant pieces of land and develop them into micro-campuses. Offices are often surrounded by vast parking lots and empty space, architects can capitalize on these vacant areas and turn them into destinations in and of themselves. When we encounter developments situated on expansive parking lots, we are presented with remarkable potential and a unique opportunity to transform these spaces into captivating outdoor amenities or incorporate additional structures, effectively creating micro campuses. These micro campuses leverage their close proximity to transportation hubs and offer community members an easy way to access live-work-play destinations.

Collaboration and Growth

As architects and designers, it is important to have an open dialogue with our peers to better understand conversions and how we can continue this cycle of adaptive reuse.

“Collaborating closely with general contractors and exchanging valuable insights is of utmost importance. While architects possess a profound understanding of the architectural and design aspects of these conversions, it is equally crucial to comprehend the specific requirements and considerations sought by general contractors,” says Tom Arsovski, Regional Practice Leader, Mixed Use, Southeast Director. “Architects should actively engage with experienced contractors operating within these markets. Given the significant interest and relevance of this topic, fostering meaningful conversations and establishing connections among professionals is paramount to staying at the forefront of this dynamic field.”

Office-to-residential conversions breathe new life into communities through increased foot traffic, the creation of mixed-use developments, preservation of historic buildings, economic growth, improved public safety, reduced commute times, and environmental sustainability. While residential conversions have been around long before the current trend, they will only continue to increase as the years go on, ultimately, paving the way for vibrant, inclusive, and sustainable urban environments that attract residents, businesses, and visitors alike.

Architecture, design and strategy firm Nelson Worldwide has named Balmiki Bhattacharya industrial practice leader. Based in Seattle, Washington, Bhattacharya will spearhead client solutions and integrate design programs to maximize operations and investments while also helping create a strategic, sustainable plan for Nelson Worldwide’s future, the firm said.

“We understand industrial facilities are the core of every business, especially today considering ongoing concerns surrounding supply chain gaps and environmental issues,” said Nelson Chairman and Chief Executive Officer John “Ozzie” Nelson Jr. Read the full article here.

SEATTLE, WA — NELSON Worldwide, award-winning architecture, design, and strategy firm, welcomes Balmiki Bhattacharya as industrial practice leader. Based in Seattle, Balmiki will spearhead client solutions and integrate design programs to maximize operations and investments while also helping create a strategic, sustainable plan for the firm’s future. Read the full article here.

The International Facility Management Association’s (IFMA) Facility Fusion conference is an annual gathering of industry innovators in the facility management world, exchanging ideas on the fast-paced, ever-changing nature of the workplace. As a specialist in change management, and one of the founding members of the Workplace Evolutionary leadership team for IFMA, I chose to present a topic I feel is a pertinent reminder of why we do what we do as workplace strategists, in a time of rampant technological advancement and aggressive shifts in the real estate market. In the end, it’s all about co-creating a better work experience, leading by example, and engaging people in the planning and design process in meaningful and timely ways with empathy. Forgetting about the end user in the process takes the eye off the target, misses key opportunities for engagement and can have a detrimental effect on the result.

In addressing “remembering the people” from a design perspective, I posed five simple questions:

• What are we designing?
• Why is “change” the verb?
• How do we engage people?
• When do we engage people?
• Who leads the change?

What are we designing?

The workplace is not a thing, it’s an experience! There’s been a fundamental shift in expectations about what we as designers are actually designing. This workplace evolution is best summarized as a shift from the workplace-as-a-product or thing (e.g., office building) to the workplace-as-a-service (ala WeWork) and currently toward the workplace-as-an-experience. So, we are now in the business of designing experiences which raises the bar on expected outcomes well beyond a product or a service, and redefines the involvement of end users as consumers in a co-creation process.

Why is “change” the verb?

When we hear the phrase “change management” most people understand it to mean managing change. Next time you hear the phrase “change management” simply reverse the verb and restate it as changing management! That’s what I mean by “change is the verb!” New work environments that support new work styles require new management styles. New management styles require leadership. Putting a hip or cool “work café” into a workplace solution will not be successful unless employees see managers leading the way by using it themselves. Management needs to model desired work behaviors. All eyes are upon what they do more so than what they may say. That’s why we emphasize new work behaviors with changing management style and behavior as the key element.

How do we engage people?

When trying to learn a new language, skill, or behavior, learning is accelerated when people can relate it to a topic about which they are passionate. Whether learning language, writing, reading, or math skills, this is referred to as interest-based learning. If we want people to adopt innovation or adapt their work behavior to a new environment, we need to understand their interests and concerns as individuals. Everyone is not affected by change in the same way, nor do they adapt at the same pace. So we need to identify stakeholders as audiences with unique interests and concerns. For example, managers moving out of dedicated private offices into an open plan environment are affected very differently than people already accustomed to working “in the open.” We need to engage people and their interests and concerns in ways customized to what’s uniquely at stake for them.

When do we engage people?

We strongly advocate the principle that the change management process must run from beginning to end in parallel and integrated with the design process. Change is not something we “sell” to end users once a design solution is already fully developed without their input. Genuine engagement must go well beyond persuasion and influence used to get people to accept innovative ideas involving new choices about how, when and where to work. The change process begins during the pre-design “programming” stage engaging end users in a dialogue about imagining alternative workplace solutions that better support the way they work. When people see their ideas reflected in proposed design concepts, they don’t need to be “sold” on new ideas.

Who leads the change?

Leading requires changing hats. Trying on a hat makes us more aware of what fit and style make us feel more or less comfortable. We have more to learn about why a hat makes us feel uncomfortable. Trying on hats other people wear allow us to understand them and ourselves better. When we think of hats we wear similar to roles we play, sometimes simply changing hats (or roles) requires empathy and makes all the difference in bringing about and being open to change. Whether you’re a designer embracing workplace as an experience, a manager embracing a new management style and modeling new work behaviors, a facility manager responsible for maintenance and operations, or any other player in the workplace creation process, we will all succeed more together by trying on the hats of others. This empathetic process is what we refer to as human-centered design. Mahatma Ghandi said it best… “You must be the change you want to see in the world.”

Hotel Management covers the latest sanitizing strategies, sustainability and hotel design trends in the age of COVID-19, NELSON Worldwide’s Jim Stapleton, vice president, weighs in. Read more here.