Interesting article and the challenges it presents are worth knowing. Some thoughts: There's constant mention of "financial viability of conversion" with no mention of the financial viability of...
Interesting article and the challenges it presents are worth knowing.
Some thoughts:
There's constant mention of "financial viability of conversion" with no mention of the financial viability of your office building sitting empty in perpetuity and you going broke because you can't be bothered to read the writing on the wall. Where have I heard that story before... Of course, some are probably just waiting for the inevitable bailout for being overleveraged with an outdated business model and it'll be my tax payments that hand it to them.
There is a large focus on massive skyscrapers here and I'm willing to put money up that most office workers don't/didn't work in one. They usually worked in smaller, 5-10 story office buildings that won't have the same challenges mentioned here. In all my years of employment, I have worked in exactly one skyscraper, the rest were all smaller buildings and office parks. Not as glamorous as living on the 30th floor of a converted skyscraper, but NYT is very much a national if not worldwide publication and only focusing on the challenges of converting skyscrapers in congested urban centers leaves the story lacking.
Exactly. It isn't about how hard or easy it is so much as "how can we maximize profits with retrofitting" The smaller older buildings will be low hanging fruit first, while they lobby for "humans...
And the resulting rents aren’t cheap, ranging today from $3,500 to $7,000 a month. Conversions in Manhattan tend to create market-rate “luxury” rentals, or condos selling for $3 million to $4 million.
That’s in part because in New York and many other markets, it’s hard to cover the costs of conversion while producing housing affordable to middle-class or lower-income residents. “Without public policy, without the city offering incentives, it just economically is not viable,”
Exactly. It isn't about how hard or easy it is so much as "how can we maximize profits with retrofitting"
The smaller older buildings will be low hanging fruit first, while they lobby for "humans don't need windows" and "pay us to retrofit"
None of these are going to be turned into affordable housing units
It's looking like affordable housing is the only thing they'll be able to afford to convert these into. I cannot see it being viable for anything but dormitory-like living where people get private...
It's looking like affordable housing is the only thing they'll be able to afford to convert these into. I cannot see it being viable for anything but dormitory-like living where people get private rooms for sleeping but have to share most other amenities, like bathrooms, kitchens, work, and entertaining spaces, etc. communally.
Those are basically illegal in most places now, but this sort of hostel/boarding house living space was not uncommon in the pre-war era, and was the primary living arrangement for working class men without families.
This was my first thought as well reading the article. They might be able to collect higher rent for commercial however they're obviously not planning on that long term since they're already...
There's constant mention of "financial viability of conversion" with no mention of the financial viability of your office building sitting empty in perpetuity and you going broke because you can't be bothered to read the writing on the wall. Where have I heard that story before... Of course, some are probably just waiting for the inevitable bailout for being overleveraged with an outdated business model and it'll be my tax payments that hand it to them.
This was my first thought as well reading the article. They might be able to collect higher rent for commercial however they're obviously not planning on that long term since they're already talking about taking $800 billion in losses on value. Certainly $* > $0, right? Then again there are a high number of landlords willing to let an empty building simply rot from non-use then lower rents to get people in.
I also haven't seen any mention of simply larger apartments. The one apartment they kept using an an example in the other buildings was like 582 sq ft, wasn't it? That's a tiny home size in most places. The zig-zag apartments in the last interactive picture (180 Water Street) feels like it would be a nightmare since just looking at the floorplan made me irrationally angry, lol.. If it's a particularly challenging problem building wouldn't less=more?
Is there any reason that mixed use buildings aren't being mentioned? The first x floors could be shops and offices with higher floors being apartments. Or if they want to maximize rent could they put soundproof walls and make a right/left side (commercial/apartments) so they could charge businesses more based on "luxary" or vanity higher floor numbers? They mention an abundance of elevators in these buildings so couldn't they split some that are commercial only and some that are residential only?
You also raise an interesting point that I didn't even realize. In the other thread about the $800 billion loss I kept naturally thinking the tallest of the tall sky scrapers per city in my mind automatically without even considering the "medium 'scrapers" or smaller. Just another example of how the landowners/landlords could consolidate businesses into one set of buildings while converting the easier/smaller ones into apartments. Adapt or die
I don't think there's enough need for retail space to use up all the apartments. Mixed use towers in that way are very normal for the areas it's talking about so I'd expect it to be part of the...
Is there any reason that mixed use buildings aren't being mentioned?
I don't think there's enough need for retail space to use up all the apartments. Mixed use towers in that way are very normal for the areas it's talking about so I'd expect it to be part of the equation. Hopefully higher supply of retail space will be healthy for the small business ecosystem. One of the impacts of high real estate costs in a lot of places is that it's forcing out a lot of types of businesses that need a lot of floor space but don't clear a ton of revenue. It's hard to run a decent sized gym or a hobby store (think Gunpla and board games, not Michaels) or even an independent theater with appreciable amounts of seating in a town like New York. Even hardware stores struggle. Many things get crowded out by high end boutiques and restaurants/bars.
The article briefly mentions: One resource I found is this article from CBRE: The financial outlook of undertaking a conversion is not very attractive for developers. Making a space livable is...
The article briefly mentions:
That’s in part because in New York and many other markets, it’s hard to cover the costs of conversion while producing housing affordable to middle-class or lower-income residents. “Without public policy, without the city offering incentives, it just economically is not viable,” said Nathan Berman, the head of Metro Loft (the city’s own conversion task force concluded the same).
"internal partitioning, reworking of plumbing and electric, and distribution of HVAC throughout the building must be addressed, as must the redesign of spaces that include multifamily amenity areas, such as a gym or lobby. The cost of conversion may range from $100 to $500+ per square foot, depending on the original layout, existing conditions, and exact scope of work"
In 2022, CBRE EA estimates that the average multifamily building, with 96.5% occupancy, recorded a NOI of approximately $16 per sq. ft. per year and sold for approximately $300 per sq. ft. Whereas the average office building, with an occupancy of 83.7%, had an approximate NOI of $15.50 per sq. ft. per year and sold for approximately $320 per sq. ft.
The financial outlook of undertaking a conversion is not very attractive for developers. Making a space livable is very costly, so any conversion must be done with an eye on the luxury segment that can afford prices that make the conversion feasible.
I wrote up an extensive comment about this very issue here in another thread, and that's exactly what the issue is. I've personally had these discussions with developers in my city, and very few...
I wrote up an extensive comment about this very issue here in another thread, and that's exactly what the issue is. I've personally had these discussions with developers in my city, and very few are willing to touch these types of projects despite an abundance of vacant offices downtown. The costs are astronomically high, and the rent required commanded for the project often grossly exceed market rates (again, this is specific to our city). You really have to have the right size and shape of the building, which this article goes into in details about and I also explained in my comment. Another factor in our city is that older properties which could be used for this sort of thing are either so badly out of modern code that there's even more cost, and/or are partially governed by historical architecture rules (either because of the building itself or the zoning of the area) that also add cost and complexity.
The nonprofit I work with built a couple of affordable housing units in one of the historical districts in town on land donated to us which was governed by these historical architecture rules. By the time we were done, the houses were no longer considered to be affordable (did not meet the financial requirements for the income range families that our organization serves).
If conversions were feasible, we'd be seeing more of them. Hell, we'd probably be seeing a slew of developers who would specialize in that kind of work. But the logistics and economics of these types of projects are so difficult to align in the vast majority of cases that conversions will continue to be rare, except for specific buildings in specific markets.
Thanks for that article, gives some great insights into costs and occupancy. It does put numbers to my statement, that it becomes feasible once there's no one in the buildings. A reckoning that's...
Thanks for that article, gives some great insights into costs and occupancy. It does put numbers to my statement, that it becomes feasible once there's no one in the buildings. A reckoning that's coming as vacancy rate isn't calculated on how many butts are in seats in the office, but how many leases remain active. With many commercial leases being 3-5 years and many others being stretched out to 10 years (my previous employer signed a 10 year lease on the full floor of a 24k sqft plate building in January 2020), they're sitting on a problem that's not going to be fully calculated until 2030.
Good interactive NYT article that explains the deep technical and design challenges of turning offices into apartments, ranging from mechanical and plumbing to natural lighting. Link is a Gift...
Good interactive NYT article that explains the deep technical and design challenges of turning offices into apartments, ranging from mechanical and plumbing to natural lighting.
Link is a Gift link, so there shouldn't be a paywall.
Thanks for the gift link! I love Interactive sites, but they suck for mirroring. :( It was a great article, BTW. Very interesting to see that there is actually a viable solution to convert modern...
Thanks for the gift link! I love Interactive sites, but they suck for mirroring. :(
It was a great article, BTW. Very interesting to see that there is actually a viable solution to convert modern commercial skyscrapers into residential apartment buildings. Even if it does end up producing rather expensive apartments, it's still better than nothing.
I really don't understand this image. It's not like the hole you dig out of a building is made out of Jenga blocks that you can just place somewhere else. What are they trying to say here? How...
It's not like the hole you dig out of a building is made out of Jenga blocks that you can just place somewhere else. What are they trying to say here? How would you be "reallocating" that volume? There's no building material that you can reuse. Why do you even need the extra volume?
Also the lower interior facing units don't seem like they'd get much of the benefits of a window. The natural light will be perpetually shadowed and how much fresh air do you really get circulating all the way down a giant hole? They'd need to have some kind of airways up and down the building I would think. One of the monstrous, football field sized footplates will be fine though. In fact, I think this is basically how "commie blocks" are set up. They just tend to be constructed as multiple adjoining buildings instead of one building with a hole in it.
I think it comes down to the building being permitted or licensed for a certain amount of square footage. By taking that area from the middle of the building they are then allowed to add it back...
I think it comes down to the building being permitted or licensed for a certain amount of square footage. By taking that area from the middle of the building they are then allowed to add it back to the top without having to do some kind of extensive legal wrangling to "grow" the size of the building. Adding that luxury space to the top would help offset the cost of conversion.
Yeah @EgoEimi pointed this out and it makes a lot of sense. Where I live the specific height of buildings tends to be a huge sticking point though. On row-houses people don't like individual...
Yeah @EgoEimi pointed this out and it makes a lot of sense. Where I live the specific height of buildings tends to be a huge sticking point though. On row-houses people don't like individual houses on the block sticking out. So I was surprised people would be okay with making the building taller I was surprised.
The article does not explain it deeply but suggests that floorspace can be displaced under zoning rules. So if you remove X square footage, then you can add it (and no more) elsewhere. Sacrificing...
The article does not explain it deeply but suggests that floorspace can be displaced under zoning rules. So if you remove X square footage, then you can add it (and no more) elsewhere.
Sacrificing so much floorspace and cutting it out in the first place must be astronomically expensive, so the costs must be recouped somehow to make it economical.
I wonder why fiber optic skylights (or wall lights) aren't a more popular option for those larger new buildings. They don't grant you any kind of view, but if your windows are facing into a light...
I wonder why fiber optic skylights (or wall lights) aren't a more popular option for those larger new buildings. They don't grant you any kind of view, but if your windows are facing into a light well (like the one cut into the example building) then you wouldn't have much of a view regardless.
The tops or bottoms (or sides) of exterior facing apartment windows could be allocated to provide sunlight to windowless inner apartments. New office windows tend to be ceiling to floor but most residences are used to smaller windows. The difference in area could go to the inner apartments.
I wouldn't be surprised if it were a question of price. A lot of landowners will choose the cheapest possible options wherever they can because they don't have to live with those decisions. I...
I wouldn't be surprised if it were a question of price. A lot of landowners will choose the cheapest possible options wherever they can because they don't have to live with those decisions.
I believe those lights also require a certain amount of maintenance for the collectors they put on the roof.
The bs around these conversions is hysterical. Everyone is running to the "It can't be done!" and "it;' too expensive!" Guess what, is can be done, and all building conversions cost money. So just...
The bs around these conversions is hysterical. Everyone is running to the "It can't be done!" and "it;' too expensive!" Guess what, is can be done, and all building conversions cost money. So just rent out some loft-like apartments that are massive to fit window requirements and replace some windows. Get over the BS and stop trying to talk people out of doing these much need conversions to solve our nation's housing crisis.
True or not, articles like this are not acting in good faith. The premise must be, "this may be hard but can and should convert what buildings we can as fast as we safely can."
I don't think anyone is trying to talk anyone out of doing this. Developers have actually looked at these and won't do these projects because they're complicated and not cost-effective. If you...
I don't think anyone is trying to talk anyone out of doing this. Developers have actually looked at these and won't do these projects because they're complicated and not cost-effective. If you think it's so easy, there's nothing stopping you from starting your own real estate development/conversion company and giving it a shot.
It's already been thoughtfully discussed and illuminated in this thread, the technical and design challenges of conversion. If you read the article or this thread, then you would have gathered...
It's already been thoughtfully discussed and illuminated in this thread, the technical and design challenges of conversion.
If you read the article or this thread, then you would have gathered that it is utmost challenging to create livable space 100 feet deep into a floorpan away the nearest natural light source. Regulations often require livable spaces (bedrooms) to have a source of natural light.
Interesting article and the challenges it presents are worth knowing.
Some thoughts:
Exactly. It isn't about how hard or easy it is so much as "how can we maximize profits with retrofitting"
The smaller older buildings will be low hanging fruit first, while they lobby for "humans don't need windows" and "pay us to retrofit"
None of these are going to be turned into affordable housing units
It's looking like affordable housing is the only thing they'll be able to afford to convert these into. I cannot see it being viable for anything but dormitory-like living where people get private rooms for sleeping but have to share most other amenities, like bathrooms, kitchens, work, and entertaining spaces, etc. communally.
Those are basically illegal in most places now, but this sort of hostel/boarding house living space was not uncommon in the pre-war era, and was the primary living arrangement for working class men without families.
This was my first thought as well reading the article. They might be able to collect higher rent for commercial however they're obviously not planning on that long term since they're already talking about taking $800 billion in losses on value. Certainly $* > $0, right? Then again there are a high number of landlords willing to let an empty building simply rot from non-use then lower rents to get people in.
I also haven't seen any mention of simply larger apartments. The one apartment they kept using an an example in the other buildings was like 582 sq ft, wasn't it? That's a tiny home size in most places. The zig-zag apartments in the last interactive picture (180 Water Street) feels like it would be a nightmare since just looking at the floorplan made me irrationally angry, lol.. If it's a particularly challenging problem building wouldn't less=more?
Is there any reason that mixed use buildings aren't being mentioned? The first x floors could be shops and offices with higher floors being apartments. Or if they want to maximize rent could they put soundproof walls and make a right/left side (commercial/apartments) so they could charge businesses more based on "luxary" or vanity higher floor numbers? They mention an abundance of elevators in these buildings so couldn't they split some that are commercial only and some that are residential only?
You also raise an interesting point that I didn't even realize. In the other thread about the $800 billion loss I kept naturally thinking the tallest of the tall sky scrapers per city in my mind automatically without even considering the "medium 'scrapers" or smaller. Just another example of how the landowners/landlords could consolidate businesses into one set of buildings while converting the easier/smaller ones into apartments. Adapt or die
I don't think there's enough need for retail space to use up all the apartments. Mixed use towers in that way are very normal for the areas it's talking about so I'd expect it to be part of the equation. Hopefully higher supply of retail space will be healthy for the small business ecosystem. One of the impacts of high real estate costs in a lot of places is that it's forcing out a lot of types of businesses that need a lot of floor space but don't clear a ton of revenue. It's hard to run a decent sized gym or a hobby store (think Gunpla and board games, not Michaels) or even an independent theater with appreciable amounts of seating in a town like New York. Even hardware stores struggle. Many things get crowded out by high end boutiques and restaurants/bars.
The article briefly mentions:
One resource I found is this article from CBRE:
The financial outlook of undertaking a conversion is not very attractive for developers. Making a space livable is very costly, so any conversion must be done with an eye on the luxury segment that can afford prices that make the conversion feasible.
I wrote up an extensive comment about this very issue here in another thread, and that's exactly what the issue is. I've personally had these discussions with developers in my city, and very few are willing to touch these types of projects despite an abundance of vacant offices downtown. The costs are astronomically high, and the rent required commanded for the project often grossly exceed market rates (again, this is specific to our city). You really have to have the right size and shape of the building, which this article goes into in details about and I also explained in my comment. Another factor in our city is that older properties which could be used for this sort of thing are either so badly out of modern code that there's even more cost, and/or are partially governed by historical architecture rules (either because of the building itself or the zoning of the area) that also add cost and complexity.
The nonprofit I work with built a couple of affordable housing units in one of the historical districts in town on land donated to us which was governed by these historical architecture rules. By the time we were done, the houses were no longer considered to be affordable (did not meet the financial requirements for the income range families that our organization serves).
If conversions were feasible, we'd be seeing more of them. Hell, we'd probably be seeing a slew of developers who would specialize in that kind of work. But the logistics and economics of these types of projects are so difficult to align in the vast majority of cases that conversions will continue to be rare, except for specific buildings in specific markets.
Thanks for that article, gives some great insights into costs and occupancy. It does put numbers to my statement, that it becomes feasible once there's no one in the buildings. A reckoning that's coming as vacancy rate isn't calculated on how many butts are in seats in the office, but how many leases remain active. With many commercial leases being 3-5 years and many others being stretched out to 10 years (my previous employer signed a 10 year lease on the full floor of a 24k sqft plate building in January 2020), they're sitting on a problem that's not going to be fully calculated until 2030.
Those smaller buildings are likely easier to retrofit but may be more costly per unit due to the smaller scale of the project.
Good interactive NYT article that explains the deep technical and design challenges of turning offices into apartments, ranging from mechanical and plumbing to natural lighting.
Link is a Gift link, so there shouldn't be a paywall.
Thanks for the gift link! I love Interactive sites, but they suck for mirroring. :(
It was a great article, BTW. Very interesting to see that there is actually a viable solution to convert modern commercial skyscrapers into residential apartment buildings. Even if it does end up producing rather expensive apartments, it's still better than nothing.
I really don't understand this image.
It's not like the hole you dig out of a building is made out of Jenga blocks that you can just place somewhere else. What are they trying to say here? How would you be "reallocating" that volume? There's no building material that you can reuse. Why do you even need the extra volume?
Also the lower interior facing units don't seem like they'd get much of the benefits of a window. The natural light will be perpetually shadowed and how much fresh air do you really get circulating all the way down a giant hole? They'd need to have some kind of airways up and down the building I would think. One of the monstrous, football field sized footplates will be fine though. In fact, I think this is basically how "commie blocks" are set up. They just tend to be constructed as multiple adjoining buildings instead of one building with a hole in it.
I think it comes down to the building being permitted or licensed for a certain amount of square footage. By taking that area from the middle of the building they are then allowed to add it back to the top without having to do some kind of extensive legal wrangling to "grow" the size of the building. Adding that luxury space to the top would help offset the cost of conversion.
Yeah @EgoEimi pointed this out and it makes a lot of sense. Where I live the specific height of buildings tends to be a huge sticking point though. On row-houses people don't like individual houses on the block sticking out. So I was surprised people would be okay with making the building taller I was surprised.
The article does not explain it deeply but suggests that floorspace can be displaced under zoning rules. So if you remove X square footage, then you can add it (and no more) elsewhere.
Sacrificing so much floorspace and cutting it out in the first place must be astronomically expensive, so the costs must be recouped somehow to make it economical.
Ah that makes sense. So I guess the relationship between removed and added floor space is about falling within zoning/permit regs?
I wonder why fiber optic skylights (or wall lights) aren't a more popular option for those larger new buildings. They don't grant you any kind of view, but if your windows are facing into a light well (like the one cut into the example building) then you wouldn't have much of a view regardless.
The tops or bottoms (or sides) of exterior facing apartment windows could be allocated to provide sunlight to windowless inner apartments. New office windows tend to be ceiling to floor but most residences are used to smaller windows. The difference in area could go to the inner apartments.
I wouldn't be surprised if it were a question of price. A lot of landowners will choose the cheapest possible options wherever they can because they don't have to live with those decisions.
I believe those lights also require a certain amount of maintenance for the collectors they put on the roof.
I assume part of it is for air circulation and having an exit in case of fire.
The bs around these conversions is hysterical. Everyone is running to the "It can't be done!" and "it;' too expensive!" Guess what, is can be done, and all building conversions cost money. So just rent out some loft-like apartments that are massive to fit window requirements and replace some windows. Get over the BS and stop trying to talk people out of doing these much need conversions to solve our nation's housing crisis.
True or not, articles like this are not acting in good faith. The premise must be, "this may be hard but can and should convert what buildings we can as fast as we safely can."
I don't think anyone is trying to talk anyone out of doing this. Developers have actually looked at these and won't do these projects because they're complicated and not cost-effective. If you think it's so easy, there's nothing stopping you from starting your own real estate development/conversion company and giving it a shot.
It's already been thoughtfully discussed and illuminated in this thread, the technical and design challenges of conversion.
If you read the article or this thread, then you would have gathered that it is utmost challenging to create livable space 100 feet deep into a floorpan away the nearest natural light source. Regulations often require livable spaces (bedrooms) to have a source of natural light.