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Two factors seem to dominate New York real estate right now: soaring rents, thanks to a lack of housing supply, and millions of square feet of unused office space. On this episode of Bisnow Reports, we sit down with two women tasked with coming up with possible solutions to the complex challenges unique to office-to-residential conversions.
Real Estate Board of New York Senior Vice President of Planning Basha Gerhards and CBRE Director of Research and Analysis Nicole LaRusso sit on the city’s Office Adaptive Reuse Task Force, which released a report this month with 11 concrete recommendations to make changes to state laws and city zoning requirements to open up more space that is eligible for conversion. The task force also lays out a case for incentives for developers to take on these projects.
“Conversions are not quick money,” Gerhards said on the podcast. "These are not easy. You're dealing with an individual building with its individual quirks and characteristics.”
The task force projects if the recommended changes are implemented, it would open up an additional 136M SF eligible for conversion.
"Only 10% of our housing production has happened in the last decade," Gerhards said. "We also haven't been producing enough housing, so if one way we can solve that is taking these obsolete office buildings and converting them to residential, then conceptually, yes, we should all be in a good place to agree and be able to move forward."
We also speak to Moody's Analytics senior economist Thomas LaSalvia about the economics underlying these projects.
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