Can my office building go residential?
Converting office space in Midtown continues to be a hot topic as recent office buildings plan their residential future. While conversion is a viable and practical way forward for some assets, it’s by no means a one-size-fits-all solution for underutilized office buildings.
So this month, I wanted to share some thoughts on how and when it can make sense, as well as some mitigating factors in the Anatomy of an Office to Residential Conversion.
830 Third Avenue starts its engines on a conversion from office to residential.
Here is how it works:
Small Floorplates:
- Divides into efficient residential units without deep, windowless areas
- Results in more natural light and higher living quality
High Window-to-Area Ratios:
- Side-core designs maximize usable space and minimizes corridors
- Ideal for residential configurations with efficient apartment layouts
Cost Considerations:
- Conversions are expensive, requiring modifications for plumbing, HVAC, and compliance with residential codes
- However, renovating office space every 5-10 years with new tenant preferences in addition to regular updates to lobbies, base building systems, etc. is not much cheaper!
Case Study - 830 Third Avenue:
- Small floorplates, high window-to-area ratio with a side core—perfect for residential conversion.
- Third Avenue has one of the highest office vacancy rates in Midtown, making conversion more compelling.
- A blank slate in a high-vacancy office market presents a strong argument for repositioning the building into residential use.
Until next month,
Ben
Ben Blumenthal
Principal Broker | Noah & Co.
For the rest of our September 2024 Newsletter, click here.