Researchers have identified more than 50 office buildings in Dallas-Fort Worth that could potentially be converted to residential.
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The buildings range from downtown high-rises to older, suburban office properties, per the Dallas Morning News. The recommendations are outlined in a working paper from the National Bureau of Economic Research, New York University and Columbia University.
Turning office buildings into apartments is commonly thought of as a way of hitting two birds with one stone. Conversions would not only address the nation’s housing deficit but also help remove vacant office space from the market.
“[Conversion] paves the way for restoring asset values and tax revenues, alleviating housing shortages, and meeting climate goals, while mitigating the negative externalities of vacant offices,” the report said.
Some of the properties that made the list are already slated for conversion. A handful of projects underway in Downtown Dallas are expected to remove a significant chunk of vacant office space from the submarket.
But not every office building is a suitable candidate, especially when it comes to finances. Office-to-resi conversions can cost anywhere from $250 per SF to $350 per SF, which rivals the cost of a new build in some markets.
The working paper found that only six cities are financially feasible for conversions — New York, San Francisco, San Jose, Boston, Denver and Washington, D.C.
In cities where office conversions tend not to make good financial sense, assistance from the public sector is critical, researchers found.
Modifications to local zoning ordinances, building code adjustments, local property tax abatements and debt subsidies, and the activation of federal programs are all tools that could help make the numbers work.
Cities like Pittsburgh and Boston have already begun offering tax breaks for conversions that set aside a number of apartments for low-income families. Dallas does not have a designated incentive for office-to-resi projects, though historic landmarks are eligible for a tax exemption when converted to residential.
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