In a post-pandemic world in which office vacancies have climbed to a twenty year high nationwide and the country faces a housing supply shortage of roughly 3.8 million units, office building owners are increasingly embracing a panacea for both issues. The City of Dallas has emerged as a leader in converting empty office buildings to bustling multifamily apartments.
The greenest building is one that is already built. Adaptive reuse of office buildings preserves historic buildings, expedites the delivery of new housing product, eliminates demolition costs, reduces development costs, and injects sustainable livelihood into urban areas. Replacing empty offices with multifamily apartments can be catalytic for urban areas by providing foot traffic and consumer spending that support neighboring retail on an around-the-clock basis instead of Monday through Friday, 9-to-5.
According to a recent RentCafe report, Dallas is on track to add 1,912 additional apartment conversions in coming years, placing it No. 10 in the U.S. in the category. And 80% of those adaptive reuse projects will be in office buildings, exceeding the share in Los Angeles, New York City, and Chicago.
Within the next two years, completed conversions will slice Downtown Dallas' office vacancy in half, while adding over 5,000 new residents to the area. Downtown Dallas' residential population currently hovers around 14,000, up from a mere 200 residents in 1999. Office to multifamily conversions have the potential to accelerate the growth of Downtown Dallas, and downtowns across the country, at a breakneck pace.
Standing at 50 stories, Santander Tower is Dallas' eight tallest building. Pacific Elm Properties and Mintwood Real Estate recently collaborated to convert 11 of the 50 floors into 291 residential units, and residents began moving into the repurposed building last month. Pacific Elm plans to implement the strategy in four additional skyscrapers nearby. Office building owners and apartment developers are crafting similar success stories nationwide. Office to multifamily apartment conversions are here to stay.
This article is presented for informational purposes only and is not intended to constitute legal advice.
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