How to Justify an Additional $25 per sq ft for Office Conversions
Originally published on April 10, 2023 by Miles Haladay for NAIOP E-Newsletter.
America faces a multipronged real estate crisis. We have a stubborn residential housing shortage, high office vacancy rates, and flight from many downtown hubs that is killing off businesses servicing those areas. In West Coast cities like San Francisco, it’s been dubbed the “donut effect,” with workers moving farther away from the urban core.
We need to build 3.8 million more housing units in the United States to keep up with household formation rates – and we’re very behind. Construction rates need to double from now to 2030 to bring us up to speed. Climate change only raises the stakes: to stave off the worst-case climate scenario and double construction output in the next seven years, we need to slash per-project emissions by at least 70%.
Converting office towers into housing could solve multiple problems at once: increase available housing; revitalize downtowns and their property tax base; all while attracting populations to city centers where green living is easier.