Office-to-Multifamily Conversions Becoming More Viable

Charlotte, NC, July 18, 2023-"According to Maryland-based real estate consultancy RCLCO (Private), office-to-multifamily building conversions are becoming more viable for developers, reports Truist. 

“The company summarized that previously, building a new multifamily structure was cheaper than converting an old office space for residential usage. However, rising office vacancy rates could lead to a repricing of office space. The company noted that about one-third of real estate professionals they surveyed indicated office values would decline more than 20% from peak to trough. Along with the rising expenses related to new construction, such as materials and labor, declining office property values could make it cheaper to purchase old office space and convert it to a multifamily structure.”