Office Landlords Consider Demolitions As Conversion Challenges Mount

[Gantz]

Originally Posted by uaarkson

I don’t know man. It may be time to just admit that massive office skyscrapers are now simply obsolete. Sure, some can be converted in markets where it pencils out. But most American downtowns just don’t have the critical mass of residential and small business density that generates the levels of demand necessary for residential conversions of large structures.

In Detroit, there has been frequent recent discussions on the fate of the Renaissance Center. In the absence of GM’s corporate workforce, the sheer absurdity of the complex is more nakedly apparent than ever. It is an anti-urban fortress, icon of corporate greed and excess, and there is now a real possibility that it will be partially or even mostly demolished.

Massive office skyscrapers are performing well and are in demand. Just not the old ones. The new Class A stuff has a lot of demand.
Post WW2 architecture is not just crap on the outside, but it is also bad on the inside and no one wants to work there.

[Klippenstein]

Residential Conversion Announced For Office Building In The Loop

the previous owner returned the building’s deed in-lieu of a foreclosure to its lender Acres Commercial Realty, squashing plans for a 144-unit conversion. However now Acres has partnered with Mavrek Development for a new proposal.

Those plans call for an even larger redevelopment, set to bring more than 200-units to the building made up of studios, one-, and two-bedroom layouts. These will have an emphasis with in-unit workspaces, with the building receiving various upgrades and amenities like a coworking lounge, fitness center, and rooftop deck.

[DCReid]

But now this article...

More than 1 billion square feet of U.S. office space is feasible for residential conversion...

More than 228.3 million square feet of office space nationally — or 2.7% of existing stock — was classified as Tier I, while an estimated 1 billion square feet (12.1% of existing stock) was considered Tier II. Most of the identified viable conversion candidates are within central business districts or urban submarkets...

New York a top market for conversion potential...

https://www.appraisaldevelopment.com...p?article=6307

[craigs]

Originally Posted by DCReid

But now this article...

More than 1 billion square feet of U.S. office space is feasible for residential conversion...

More than 228.3 million square feet of office space nationally — or 2.7% of existing stock — was classified as Tier I, while an estimated 1 billion square feet (12.1% of existing stock) was considered Tier II. Most of the identified viable conversion candidates are within central business districts or urban submarkets...

New York a top market for conversion potential...

https://www.appraisaldevelopment.com...p?article=6307

Imagine if we could somehow get all of those properties converted. We sure need the housing.

Also from that article: "Other major markets — including San Francisco, Los Angeles, Chicago and Miami — also have a significant amount of office space that, per CommercialEdge's calculation, would have potential for office-to-residential conversion."

[DCReid]

https://www.bisnow.com/national/news...version-125703

Some interesting statements:

"Manhattan led U.S. markets with more than 53% of its existing office stock deemed quality candidates. San Francisco, at 25.8%, and Los Angeles, at 24.7%, were the only other markets within 30 percentage points of Manhattan...With more than 85% of buildings deemed “more difficult” for conversion by the index, demolition of vacant office buildings could be easier than development. But Ressler said that's not a remedy for every building in the index’s lowest tier..."

[Nouvellecosse]

Not surprised about Manhattan considering how much historic office stock it has. Contemporary tenants often want large open floor spaces and plentiful natural light and both of those can be difficult with older office structures that have smaller floor plates and smaller windows.

[Quixote]

I guess in the end DTLA not having 150 million SF of Class A office space, something I had dreamed of 15 years ago, is now a good thing. As a result, we can focus on building a contiguous 4.25-square-mile urban core that can house up to 400-500K residents.

[LA21st]

Yea, housing is much better. Not to mention most of those highly dense office districts are dead after 6 pm and on the weekends anyway.

The skyscrapers might look good from a distance but on most street level, eh. And for the most part, the office districts all look the same. Some just have more office towers, but its really the same shit. There's barely any unique, local feel/vibe.


When I was younger I cared more about it, now I care more about street level vibrancy, retail etc.

[meh]

Obviously it's a DOOOOOOOOOOM LOOOOOOOOOOOP!!!!!!!!

[Gantz]

Originally Posted by Nouvellecosse

Not surprised about Manhattan considering how much historic office stock it has. Contemporary tenants often want large open floor spaces and plentiful natural light and both of those can be difficult with older office structures that have smaller floor plates and smaller windows.

Plus Manhattan real estate is expensive enough that even more complicated conversions tend to pencil out when it comes to ROI. Hard to do some of these conversions in cheaper markets.

[austlar1]

Originally Posted by Quixote

I guess in the end DTLA not having 150 million SF of Class A office space, something I had dreamed of 15 years ago, is now a good thing. As a result, we can focus on building a contiguous 4.25-square-mile urban core that can house up to 400-500K residents.

Never mind/Delete

[Steely Dan]

Here's some positive news of a residential-conversion of a 24 story modernist office block in Chicago.

This is the kind of building that so many say cannot be repurposed for residential.

And the best part, the developers aren't looking for a handout!!!

Details Revealed For Residential Conversion At 500 N Michigan Avenue
By: Ian Achong
7:45 am on September 16, 2024




Details have been revealed for the residential conversion of the office building at 500 N Michigan Avenue on the Magnificent Mile. Sitting on the intersection with E Illinois Street and across from the famed Intercontinental Chicago, the mostly vacant structure is going to be redeveloped by Commonwealth Development Partners who just submitted a zoning application.

The 24-story, 304-foot tall building was originally designed by SOM and opened in 1968. Since then it has seen various renovations including a major facelift to its ground floor retail space in 2020 which we covered here. Now the developer has brought on local firm GREC Architects for the design of the conversion which would keep the lower six floors as-is.

Full article: https://chicagoyimby.com/2024/09/69862.html