Redevelopment: The American Promise to Change the Face of Cities

Since 2021, the number of "office-to-residential" constructions has undergone an acceleration. In New York, record conversions are underway with the creation of 566 condominiums

The pandemic emergency is behind us, but its radical effects continue to transform the way of living and working in major cities. In the United States, the gradual abandonment of large offices and the spread of remote employment have multiplied projects to convert offices into residences, often of luxury or marketed as such. Since 2021, the number of “office-to-residential” constructions has undergone an acceleration, which Americans describe as a “skyrocketed” growth of 357%.

According to data from RentCafe, one of the most used websites for searching for houses and apartments for rent, in 2024 the number of apartments planned for the conversion of old offices has risen to 55,300, compared to 12,100 in 2021, and the average age of office buildings convertible into rentals has dropped to 72 years, 20 years less than those already converted. The most evident trend is found in Washington DC (5,820 planned units), followed by New York (5,215) and Dallas (3,163).

Large and small projects starting from New York’s Flatiron

Narrow bathrooms, scarce or too small windows, often not even openable, legal obstacles, floor plans too large to create livable apartments in the center of office floors, costs decidedly too high: converting offices into apartments is by no means a simple matter. According to a study done last year by Moody’s, only 3% of the monitored offices among those candidates in New York were convertible. The trend was seen by the business house as marginal, at best. It’s easier to theorize than to execute and profit from it.

Yet projects or announcements continue to come. Not least is the one regarding the famous Flatiron of New York, whose owners, after years of “stop & go” situations, have just announced that the historic 22-story iron-shaped tower at 175 Fifth Avenue, almost completely vacant since 2019, will have a new life with 40-45 apartments of various sizes. In this case, the triangular floor plan offers a relatively limited footprint, with just over a thousand square meters per floor. But the service structures all need to be redone.

An analysis of the phenomenon, released by the White House offices, suggests that in the second quarter of 2023, commercial real estate investment volumes decreased by 64% compared to the previous year. At the same time, office vacancies reached 18.2%, the highest in the last 30 years, from coast to coast. Along with the analysis, a guide to federal subsidies for office transformation was released to promote the so-called “housing,” as the lack of housing rose to 3.8 million units by the end of 2020.

Conversion projects must overcome significant physical complexities. Office buildings, especially newer ones, are built on increasingly larger floor plates to meet the demand for open-concept configurations. Residential buildings include, and often require, features such as windows with external opening and internal bathrooms and kitchens, which require modifications to floor-to-floor height, window systems, heating and cooling units, sewage, and elevator access. Previous conversion projects tended toward pre-war office buildings designed on smaller plates, often with courtyards, and individual offices.

According to White House data, however, 15% of commercial district office buildings in the top 105 US cities are suitable for residential conversion. RentCafe notes that a push to the trend comes from the expiration in 2024 of office mortgages amounting to $150 billion. Here are five of the most interesting conversion projects underway this year, according to RentCafe.

Washington D.C. Towers

Washington DC. Snell Properties will redevelop the Ames Center office building at 1820 Fort Myer Drive in Arlington into two residential towers with 740 units. Commercial spaces are planned on the ground floor, while the Methodist church and gas station at the base of the building will be completely rebuilt.

New York Ready for Record Conversions

New York. The iconic metropolitan area records a conversion rate of 45.4% of the total future apartment projects in the city, with an 18% increase from the previous year. The 25 Water Street project adds to others already completed in the area and involves the construction of ten new floors above the parapet of the 22-story structure built in 1969, replacing the brick facade with a modern glass frontage with larger windows and refurbishing its 1.1 million square feet (102 thousand square meters) of interior space into 1,300 rental units. Once completed, the conversion will be the largest ever undertaken in the United States by the number of units, surpassing the recent redevelopment of One Wall Street with its 566 condominiums.

Dallas: Over 3,000 Apartments for the City from Offices

In the Texan city, the conversion of offices into 3,163 apartments accounts for 58% of ongoing housing projects. The largest of these is the transformation of the Renaissance Tower on Elm Street into 550 modern luxury homes. Other projects involve the Bryan Tower (with 425 new apartments), the Oncor Building (330), and the Star-Telegram headquarters from which 268 residential units will be created.

Chicago, a Mega Project for the Windy City

The area has projects for 2,822 future apartments from former offices. Leading this change is the imposing project at 135 South LaSalle Street, the largest adaptive reuse effort in the metropolitan area. With 430 housing units, it is not only a large project but is reshaping how people will live in the Windy City. Located at 135 S. LaSalle, the Field Building will be converted into a new mixed-use hub with malls and luxury shops. The tower built in 1934 has usable space for 1.2 million square feet (111 thousand square meters) and is a landmark of the city. With Bank of America’s departure in 2020, the building presents 900,000 square feet (84 thousand square meters) of vacant space ready for conversion.

Los Angeles Also Taking on Redevelopment Challenges

In the Los Angeles metropolitan area, the conversion of vacant offices will result in 2,442 residential units. The largest project is the 695 South Vermont Avenue, with 255 new apartments. It is an 18-story building in the Koreatown district, completed in the early 1970s as an office tower above a multi-level parking garage, which according to the new structural design will remain at the base of the building.