In the face of the housing crisis, the possibility of repurposing existing commercial buildings for residential use is receiving increasing attention. The question is: Can this approach solve the housing shortage in appropriate locations, and can it be profitable for developers?
According to Urban Land Institute (ULI) experts, changing trends in the office, retail, and hotel markets are making commercial adaptive reuse not just an option, but often a necessity. In a comprehensive report, “Behind the Façade”, they analyze the cases of 30 conversions that have taken place in the U.S. in recent years. Their market observations suggest that such conversions have the potential to impact the use of real estate significantly. This is especially true for older B/C office buildings that are becoming functionally obsolete. The pandemic has accelerated this trend, driven by changing work patterns and the fact that overall post-pandemic demand for office space is lower than in the past and more concentrated in newer facilities.