A Conversation: The Trend of Converting Office Buildings to Residential Spaces: A Conversation with Architect John Cetra
Introduction:
In a recent episode of “America’s Commercial Real Estate Show” the host delves into the intriguing trend of converting office buildings into residential spaces. He interviews John Cetra, the co-founder of CetraRuddy, an architectural firm based in New York, to gain insights into the factors driving this trend, challenges faced, and the creative solutions architects are implementing. The conversation covers various aspects, from the history of such conversions to the considerations that make a building suitable for residential use.
The Growing Trend:
As of January 2023, the conversion of office buildings into multifamily residences is a hot topic in the commercial real estate sector. The trend, which gained momentum in New York with loft buildings being converted, has now become a nationwide phenomenon. John Cetra points out that while his experience is primarily in the New York metro area, the trend is visible across the country. Cities like Chicago and those on the West Coast are witnessing a surge in the conversion of office spaces to cater to the growing demand for residential units. This trend has yet to come to Miami as office properties have not seen the surge in vacancies that some northern last-to-leave-for-Florida-turn-off-the-coffeemaker cities have experienced. Chuckle.
Critical Considerations for Conversion:
John Cetra emphasizes that the size of the floor plate is a crucial factor in determining whether an office building is suitable for conversion to residential use. The lease span, or the distance from the exterior wall to a common corridor, plays a significant role. New residential buildings typically aim for a lease span of around 30 feet, while office buildings being converted may have deeper floor plates ranging from 40 to 50 feet. The challenge lies in efficiently subdividing these spaces to create residential units of the right size and rent.
Advantages of Older Buildings:
Older office buildings, especially those from the 1920s and earlier, offer unique advantages for conversion. Smaller floor plates, architectural styles like art deco, and features like large windows and high floor heights make these buildings attractive for repurposing. Cetra emphasizes the beauty of repurposing these structures, preserving architectural history, and contributing to sustainability by avoiding unnecessary demolitions.
Challenges and Solutions:
The interview touches upon the challenges of adaptive reuse, including the need to modify facades, reconfigure cores, and address structural considerations. Cetra highlights the complexities of converting buildings from the 1960s, 70s, and 80s, especially those with large floor plates. Structural modifications, including adding floors on top of existing buildings, may be necessary, but they come with additional costs.
Cost Comparison and Time Savings:
Developers are considering the cost comparison between building new multifamily structures and converting existing office buildings. Cetra notes that the cost per square foot for new residential buildings in New York ranges from $350 to $500. However, the time savings associated with converting existing buildings can be significant. Developers can occupy converted spaces much faster than constructing new buildings, providing a competitive edge in a rapidly changing market.
Entitlements and Zoning:
Discussing entitlements and zoning, Cetra points out that New York City’s zoning regulations, while complex, offer a clear framework for developers. The recent recommendations from the mayor’s office, such as extending the conversion eligibility to buildings built before 1991 and removing the 12-floor area ratio (FAR) cap, indicate a supportive stance toward encouraging more conversions. Zoning consideration would of course also need to be considered in Miami and other South Florida markets.
Creativity in Residential Design:
Cetra emphasizes the creativity involved in designing residential spaces within converted office buildings. With the challenge of deeper apartments, architects must incorporate creative layouts, home offices, and flexible spaces. The advantage of higher floor heights in office buildings allows for varied and unique designs that stand out in the rental market.
Co-Living and Innovative Amenities:
The conversation touches on the growing popularity of co-living arrangements, especially in cities like New York, where high rents make shared living spaces attractive. This is an emerging trend in Miami where residents likewise suffer from high rental rates. Developers are exploring innovative amenities to differentiate their converted buildings, creating vibrant communities with shared workspaces, recreational areas, and unique features that go beyond traditional apartment living.
HVAC Systems and Sustainability:
Cetra discusses the shift from central HVAC systems in office buildings to individualized systems for residential units. Retrofitting with Variable Refrigerant Flow (VRF) or heat pump systems provides tenants with individual control. The removal of large central systems also frees up space within the building, allowing for creative repurposing, as seen in the conversion of 20 Broad Street.
Future Policy Considerations:
As the trend of converting office buildings to residential spaces continues, Cetra raises an important policy consideration. While most conversions result in market-rate units, there is a need to explore mechanisms for creating affordable housing within these projects. Current tax incentives for new construction should be extended to cover conversions, promoting a more equitable distribution of housing options.
Conclusion:
The conversation with John Cetra shedding light on the dynamic landscape of converting office buildings into residential spaces. The trend is not only driven by market demand but also by the creative solutions architects and developers employ to repurpose existing structures. As cities evolve, policies will play a crucial role in shaping the future of these conversions, ensuring a balance between market-driven development and the need for affordable housing. This is more of a New York, Chicago, or San Francisco thing, but at some future date could be a South Florida thing, as well.