The Wray, an office building used by the United States Department of State, has been converted into apartments.
Washington:
Blocks from the White House, a posh mansion in downtown Washington that once housed offices used by the US Department of Justice, have been converted into residences for hundreds of people.
The conversion of vacant office space is among the “adaptive reuse” projects that will sweep the U.S. real estate market in 2021, where developers have purchased hotels and offices that are growing. struggling to do business and announced plans to turn them into apartments.
Michael Abrams, chief executive officer of Foulger-Pratt, the real estate developer building a 14-story building in New York, said: “The market has spoken and it shows the value of a big conversion. than continue as office space. Avenue into 255 apartments.
A survey by apartment listing service RentCafe found that about 20,100 units were built from converted properties in the United States last year, nearly double the number converted in the previous year. .
Such transitions could pave the way for a continuation of US recessions, which have not been the same since office workers fled when Covid-19 broke out nearly two years ago, leaving employers homes and local businesses are in trouble.
“The slow recovery of the office market will make it much more expensive to ship vacant office buildings,” Abrams said.
Transition could also play a role in easing the shortage of affordable housing, especially in cities like Washington, where high rents are notoriously a feature of life.
“From an overall perspective, we just need to increase supply,” said Lawrence Yun, chief economist for the National Association of Realtors.
Even more expensive
Despite the Covid-19 downturn, the average price of existing homes has increased 15.8% throughout 2021, and by last month, supply had hit an all-time low, according to NAR data. era, according to NAR data, is likely to exacerbate the affordable housing crisis. before the pandemic.
As of 2017, 48% of renters were considered by the US Government Accountability Office to be “rent-burdened” – meaning they pay more than 30% of their income in rent – a figure that has increased by six percentage points over the previous 16 years.
Meanwhile, the United States has a lot of offices. Brookings Metro employee Tracy Hadden Loh says many of them date back to the 1980s, now too old to be attractive to companies.
With their design focusing on outdated needs like space for filing cabinets, “It’s really just the whole building that’s outdated,” she said in an interview.
The company withdraws
Marc Ehrlich, chief investment officer at Rose Associates, which converted New York City offices into residential homes, said such projects tend to be “highly occupied properties with good locations and high occupancy rates.” better and better.”
One of his company’s latest commitments is to turn an office that was once used by telecommunications company AT&T into a place people want to live.
Lacking amenities like covered parking, the building is unlikely to attract commercial tenants, Ehrlich said.
However, the new apartments for rent in houston tx will have co-working spaces, as many tenants will likely want to continue working from home, he said.
In Washington, developers are flocking to properties formerly rented by the region’s top employer, the federal government.
This includes The Wray, an office building used by the State Department, but which has been completely renovated as apartments.
The only signs of its previous use are in the foyer, where the bricks are still original, as well as a directory listing the names of the State Department offices that were once located there.
“There’s been a significant drop in tenants coming back to these buildings, and that’s what puts pressure on that class of property, that’s what creates opportunity,” Abrams said.
Adaptive reuse projects tend to command high rents, says Loh, because they often require expensive renovations like building new bathrooms in former apartment buildings.
While inventory expansion has been shown to relieve price pressures elsewhere in the housing market, “This is not the solution to the housing crisis,” she added.
“This is a solution to revitalize areas like downtown that are dominated by places like office space.”
(Except for the title, this story has not been edited by NDTV staff and is published from an aggregated feed.)
