Report: Thousands of offices could be converted to housing
Avison Young looked at 14 major North American markets.
- Avison Young looked at 14 major North American cities for office buildings that might be suitable for conversion.
- Two major factors were if the office was built before 1990 and if it had floor plates below 15,000 square feet.
- In total, the firm found 8,996 offices that have potential.
The Whole Story:
More than 2,600 office buildings in key Canadian markets could be candidates for adaptive reuse, new research shows.
Data from global commercial real estate advisor, Avison Young, found that up to 34% of office buildings in 14 major North American markets have the potential to be transformed into housing. The global real estate company’s research looked at more than 26,000 buildings and identified 8,996 candidates for adaptive reuse.
The markets include four Canadian cities: Toronto, Calgary, Montreal and Vancouver.
“Adaptive reuse is an important conversation we are having around the art of the possible, to demonstrate how this potential solution contributes to placemaking and to the revitalization and vibrancy of our neighbourhoods – particularly our downtown cores,” said Sheila Botting, principal and president, professional services, Americas at Avison Young. “We must reimagine how we want to live, work and play. Adaptive reuse is one of the key components of how we do that as a community.”
The company explained identifying adaptive reuse projects is something Avison Young has been exploring. Using a combination of its proprietary AVANT by Avison Young analytics and third-party analytics, the firm identified buildings built before 1990 and those with floor plates below 15,000 square feet – two anchoring criteria that tend to help isolate buildings that offer long-term potential for conversion. Avison Young applied this search to 10 U.S. markets and four Canadian markets, including those that have witnessed heightened interest in the possible solutions provided by office conversions, like Calgary, Manhattan, and San Francisco.
“Beyond age and floor plate, other criteria must be considered – such as specific building feasibility, costs, location, and surrounding amenities – to determine prime candidacy,” said Stephen Silverstein, principal and managing director, U.S. studio project and construction management at Avison Young. “That’s where conversations with our consultants, project & construction managers, asset managers and brokerage teams come into play, although this initial data set provides a clear snapshot as a starting point of what could be possible for these markets.”
Avison Young stated that across North America, office vacancies have highlighted a flight to quality, with tenants shifting up in the marketplace to choose higher-quality, highly-amenitized offerings with increasing vacancy in class B and C buildings. They believe this presents an opportunity for owners of older buildings to rethink their asset strategy and explore options, whether that is to stay as is, renovate/upgrade, repurpose or redevelop altogether.
“People are rethinking how they use office buildings and how they view the entire downtown,” added Botting. “Whereas most downtowns have mainly office buildings, a mix of uses provides much needed energy and vibrancy – and that’s where adaptive reuse provides a tremendous opportunity to reimagine great spaces for people to connect.”