{"id":14554,"date":"2023-09-06T11:30:43","date_gmt":"2023-09-06T16:30:43","guid":{"rendered":"https:\/\/www.imegcorp.com\/?p=14554"},"modified":"2023-12-14T11:45:04","modified_gmt":"2023-12-14T17:45:04","slug":"developing-an-office-to-residential-conversion-consider-the-engineering-challenges-early","status":"publish","type":"post","link":"https:\/\/www.imegcorp.com\/insights\/blog\/developing-an-office-to-residential-conversion-consider-the-engineering-challenges-early\/","title":{"rendered":"Developing an office to residential conversion? Engineering it will bring opportunities and challenges."},"content":{"rendered":"

By Scott Campagna, PE, Senior Director of Housing\u00a0<\/span>\u00a0<\/span><\/p>\n\n\n\n
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Find funding for office-to-residential conversion<\/strong><\/p>\n

The White House has released a new plan to accelerate conversions of empty offices into affordable housing units, and to direct developers toward funding sources.\u00a0<\/span>\u00a0<\/span><\/p>\n

The plan comes as second quarter commercial real estate investment volumes have fallen by 64% year-over-year, and office vacancies reached a 30-year high of 18.2%. Meanwhile the market is estimated to need another 3.8 million housing units to meet demand.\u00a0<\/span>\u00a0<\/span><\/p>\n

The new federal guidebook catalogs billions of dollars in financing resources \u2014 low-interest loans, loan guarantees, grants, and tax incentives \u2014 available to property owners and developers, including the historic Tax Credit, the 45L New Energy Efficient Home Credit, Departments of Energy and Transportation below-market-rate loan programs, and more.\u00a0<\/span>\u00a0<\/span><\/p>\n

It also offers technical assistance to encourage these conversions to be environmentally friendly.\u00a0<\/span>\u00a0<\/span><\/p>\n

In addition, the General Services Administration and the Office of Management and Budget will identify federal properties that could be converted to housing.<\/span>\u00a0<\/span><\/p>\n

Read <\/span>more<\/span><\/a>.<\/span>\u00a0<\/span><\/p>\n

Read IMEG\u2019s executive guide about office-to-residential conversions <\/span>here<\/span><\/a>.\u00a0\u00a0<\/span>\u00a0<\/span><\/td>\n<\/tr>\n<\/thead>\n<\/table>\n

Freddie Mac estimates the U.S. has a housing deficit of <\/span>3.8 million units,<\/span><\/a> across all housing types and post-pandemic office <\/span>vacancies exceed 16%<\/span><\/a>, with some major cities reaching 31% vacancy rates. <\/span>\u00a0<\/span><\/p>\n

With this occurring in our communities, the opportunity to convert vacant or underutilized office space into residential units is being discussed as a way to revitalize communities, help struggling building owners, and address local housing needs. The market is already seeing this trend. According to RentCafe\u2019s annual <\/span>Adaptive Reuse Report<\/span><\/a>, currently there are over 45,000 apartment units being created as a result of these office conversations.\u00a0<\/span>\u00a0<\/span><\/p>\n

Some cities, including <\/span>Boston<\/span><\/a> and <\/span>San Francisco<\/span><\/a>, have begun encouraging these conversions by supporting financial incentives, changing zoning policies and finding ways to expedite plan reviews.\u00a0<\/span>\u00a0<\/span><\/p>\n

Each building is unique, and some are better suited to conversion than others. A thorough review of its basic infrastructure and systems early on can help ensure a successful project. This blog outlines some of the mechanical, electrical, plumbing, fire alarm, and fire protection issues that could add significant costs to a project if they are overlooked in the early stages.\u00a0<\/span>\u00a0<\/span><\/p>\n

Utilities<\/span>\u00a0<\/span><\/p>\n

Multifamily housing will make greater demands on the plumbing utility than an office.\u00a0<\/span>\u00a0<\/span><\/p>\n