The Price Is Still Too High for Office|to|Multifamily Conversion

In this week's Analyst, we assess the feasibility of office-to-multifamily conversion and its economic implications.

Goldman Sachs analysts just published a report titled “The price is still too high for office-to-multifamily conversion."

That goes right to the heart of a new Goldman Sachs study about office-multifamily conversion. The big problem: it costs too much. Far too much.

The price is still too high to turn offices into homes · Converting underutilized office space to residential units is harder than it sounds — in ...

The solution to the problem seems simple: convert those unused office spaces into residential units. Easy fix, right? Not so much, experts say.

And the costs can be extremely volatile. CBRE reported that office-to-multifamily conversion, “require significant capital to add more plumbing, ...

Though we expect OTM conversions to remain rare, there are high-demand multifamily markets in the West with untapped conversion potential due to ...

The office-to-multifamily conversion rate is quite low, suggesting that there may be substantial financial and physical hurdles to conversion.

At current valuations, office properties are still too expensive to be viable candidates for conversion into residential properties in most ...

It would cost too much to convert big condos into smaller apartments. ... The cost burden is not only due the direct cost of elevators ...

A research piece by Goldman found only ~0.8% of US office inventory is a financailly viable candidate for conversion.

The cost of converting an office building into a new multifamily one, for example, averages about 20% more than ground-up development, said Phil ...

But theoretically, if the demand for more housing is there — and there can be little arguing that it is — and cities recognize that office usage ...

Key Takeaways · A dearth of residential housing and oversupply of vacant office space has raised interest in the idea of real-estate conversion.

Cities have too much office space and not enough housing. Why not convert all these office buildings into apartments? As it turns out, ...

“Office vacancy has climbed to a 30-year high and at the same time there's a housing shortage. So naturally the question is, 'Why can we not ...

The high costs and challenges of converting office spaces to residential units. · Logistical hurdles like meeting residential codes and ...

Repurposing aging buildings is not just about office conversions, of course. Given how under-built America is in terms of quality market-rate ...

Location is paramount. Given the higher costs associated with conversions, which can be about 20% more than ground-up development, premium rents ...

"Nearly $150 billion of mortgages on U.S. office buildings are maturing by the end of 2024, and just over $300 billion of loans will mature by ...