Apartment Conversion: Transforming Vacant Office Buildings – Video

Apartment Conversion: Transforming Vacant Office Buildings – Video

The real estate market is in a state of crisis, with office buildings sitting vacant and interest rates at historic highs. At the same time, there is a housing crisis, with the residential market being prohibitively expensive. The question arises: why not convert these empty office buildings into affordable housing? However, the process is not as simple as it sounds, as there are many engineering and financial obstacles to overcome.

The video explores the potential of converting office buildings into urban housing, highlighting the challenges and opportunities of such a venture. It features an in-depth look at the transformation of a New York City office building into residential units and the financial and design considerations behind the conversion. The role of remote work and the changing dynamics of the workforce are also explored, with a focus on creating spaces that are conducive to work-from-home arrangements.

Ultimately, the transformation of unused office buildings into urban housing presents an opportunity to redefine the future of cities and re-energize urban spaces. The video offers a thought-provoking look at the potential of repurposing vacant office buildings to address both the commercial real estate crisis and the housing crisis.

Watch the video by 60 Minutes

Video Transcript

60 Minutes Overtime two years ago three years ago what would this floor of vent cubicles perimeter offices um very dimly lit and uh and just you know jam-packed with h paper this week on 60 Minutes our pieces about the commercial real estate crisis particular Office Buildings what happens

To all these skyscrapers when people are not going to the office 5 days a week and interest rates are at historic highs at the same time there is this housing crisis where on the one hand the the residential Market is prohibitively high the obvious question is why not convert

Some of these empty offices into housing into affordable housing in particular imagine we have a building that’s worth a100 million we met Stan Van Newberg who’s one of the world experts on on real estate he’s a professor of real estate at Columbia business school how many of these Office Buildings can

Realistically be converted to housing so we’ve looked into is in our research and we end up at a number around 10 to 15% of Office Buildings sounds distressingly low it’s a low number because there’s a lot of obstacles right A lot of these modern Office Buildings from the 70s and

80s have an enormous footprint and it’s really hard to to convert these Office Buildings bring light and air into the interior of the space have enough Plumbing have Windows that operate so there’s a lot of engineering obstacles to converting these buildings it’s not as easy as it sounds that’s right when

You say convert are you talking about air and light and running gas lines or are we talking about Demolition and then rebuilding them as Apartments when I say convert I mean repurpose we keep the original structure uh we change the facade we changed the interior we might

Have to do more radical surgery and insert air Wells into the middle so that we have more windows and more light coming into the building none of this is cheap but a lot of it is doable for a lot of buildings this is a feasible process does the math work I mean can

You convince the building owner to do it so you know that sort of gets us to a second set of obstacles which are Financial obstacles right does the math work out we’re not talking about creating affordable housing if you want to create affordable housing then you know rents are naturally going to be

Lower and so the math typically does not work out anymore so we have eight units total on this floor um mixture of two beds one beds and Studios what is what are they read for anywhere from $3,500 from the studios up to $7,500 on the two beds a month

Come on we went to a property in in lower Manhattan developed by the van Barton group where they’ve taken this office building where the tency is dropped and they’ve taken conference rooms and cubicles and they’re transforming the entire building into apartments and it is not a task you you

Undertake lightly but they have figured out the math rods they go up Joey Kelli works for the van Barton group where are we we’re 160 Water Street in the financial district in New York what do youed to be hhc uh so health and hospitals with New York City as well as

Beth Israel some of the back office why the decision to turn this to residential when we looked at the the state of the market in 2020 and some of the least expirations and and some of the consolidation that some of the office tenants wanted to do the highest and

Best use was to go residential we’re learning that these buildings are are bought and built with a lot of loan can I ask how much do you owe on this building so we actually took out a loan for 273 million uh to do this construction that’s the price tag to

Convert this that is how many units so 588 what does a converted building have to do to attract tenants will they have to add amenities some of these are what you’d expect from an apartment building the fire pit on the roof and the nice deck given the roof changes yes exactly

Some of this ironically enough is to make it accessible and friendly to to remote work so you’re sort of accelerating this trend of remote work and work from home what’s the role of work from home when you’re converting a building like this there are certain components that uh went into our design

Thinking whether those were home offices to some of the co-working spaces that we have planned on our uh roof deck amenity where there are Zoom rooms and other conference rooms um for people to to book so you’re not just converting Office Space into residential you’re building the residential so people never

Have to go to the office well there’s definitely a dynamic um shift that’s been out there and whether it’s one or two days a week when people are working from home we want them to be able to find a space outside of their unit and to be able to enjoy that space

Or even invite co-workers over for that collaborative time in this building one thing that became clear to this story real estate it goes up and it goes down and there’s booms and there’s bus but what’s going on now with zoom and hybrid work compounded by these interest rates

Is that this this is more than just a market dip this is really this this inflection point where we are asking ourselves some fairly existential questions about space and real estate and cities and what the future holds Stan Van Newberg Levens that with this idea that look this is a chance to

Redefine what a city is and reconceive of how we use space it is an opportunity cities have always reinvented themselves as long as they have existed and this is a moment of transformation we got to you know re-energize our cities make them vibrant it’s crucial for the American

Economy for its productivity for its growth I want to believe in the future of the city but it will not happen without heart work

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Video “Converting vacant office buildings into apartments” was uploaded on 01/15/2024 to Youtube Channel 60 Minutes