‘Office-To-Anything’ Is D.C.’s New Downtown Play

D.C. Mayor Muriel Bowser has made office-to-residential the hero in the city's story of downtown reinvention. 

But with millions of square feet of older offices now obsolete, developers and city officials need to think beyond that residential box, panelists said at Bisnow’s Office Repositioning Summit last week.

“Just like retail shouldn't be on every first floor of every building, residential shouldn’t be on every block of the city,” Roadside Development Managing Partner Richard Lake said at the event, which was held at The Westin Washington, DC Downtown.

There are five downtown office-to-residential conversions in the works and 11 more planned, Deputy Mayor for Planning and Economic Development Nina Albert said in her opening remarks. 

But she joined panelists who said an array of redevelopment types — from hospitality to education to updated offices — are often faster, easier and more cost-effective, as well as necessary to bring people downtown, with more than a fifth of all offices in the city vacant. 

“There are an entire other set of discussions and incentives that we’re looking at that might move more quickly on the office-to-anything,” Albert said. “Because as we started to realize, office-to-residential is just simply not enough given the oversupply of office.”

The Bowser administration has been honing in on residential conversions downtown as its signature strategy since the pandemic rocked the central business district.

After touring the first major office-to-residential conversion in the Golden Triangle area of downtown Monday, Bowser announced that applications open March 22 for the city’s new 20-year tax abatement program for residential conversions, the administration’s big carrot aimed at convincing developers to convert office buildings downtown.

“We know that right now, the financial equation doesn’t exactly work,” Albert said at last week's event.

“The activity and interest is there, and now we want to, what I call, ‘lubricate the market’ with a tax abatement to make sure that it really keeps moving on,” she added.

But that vision is starting to broaden. Panelists said that although residential often doesn’t make sense, other uses can help fill in the gaps for millions of square feet of obsolete office. 

Around 97% of the real estate in the Golden Triangle is office product, Golden Triangle BID President Leona Agouridis said at the event, while offices make up 78% of the DowntownDC BID region, Downtown BID President Gerren Price said.

In Georgetown, Douglas Development Corp. is converting a five-story office building and its townhomes next door into a 106-room hotel. 

The 28K SF building at 1023 31st St. NW was home to Hickok Cole Architects before the firm signed a lease in NoMa in 2020. Now, Douglas is spending $38M to turn it into the Marriott International-branded The Canal House of Georgetown. 

Several factors made the midblock building less than ideal for residential but feasible for a hotel, Douglas Director of Development Drew Turner said. One side of the building looks out onto an alley, which would be unappealing for a Georgetown resident. But that doesn’t matter as much for a hotel.

“If you're laying your head there for a night, in some cases, if you’re on business, you might not even look out your window,” Turner said. “For us, it’s really all about location.” 

The building has eight parking spaces required by code that are being turned into back-of-the-house space for the staff. 

Office buildings are often overparked, WDG Architecture Managing Principal Sean Stadler said, but he noted that converted subterranean parking makes great housekeeping and amenity space for hotels.

“We’re in the capital of the world. We are a tourist city,” Stadler said. “There’s always going to be a need for hospitality.”

He said that for a multifamily developer to consider an expensive conversion project, the goal is density, getting to 200 or 300 units. That forces developers to shrink unit sizes, limiting appeal.

“In a hospitality project where the sweet spot is 150 keys, these office buildings pencil out for those types of projects,” he said. “Then, if they’re larger, we can dual-brand them.”

Bowser's Downtown Action Plan, released last week, calls for the city to spend $40M in attracting residents, including streamlining residential permitting processes and establishing a grant program for residential amenities downtown. 

But it also focuses on other uses for office buildings, highlighting university uses in two of the plan's five regional nodes. 

Johns Hopkins University, the University of Southern California, Princeton University and Syracuse University have all opened facilities of varying sizes in D.C.'s core, and the Bowser administration wants to attract more institutions to make use of the ample available commercial space.  

Over the last seven years, seven universities have established a presence within the Golden Triangle, Agouridis said.

“University uses loom very large within the Downtown Action Plan,” she said.

The desire to look at an array of uses for vacant office space in the District comes from necessity. D.C. has been among the hardest-hit cities by the pandemic's impact on work, and its leaders recognize the need for dramatic action.

“We just went through a pivotal moment for the world where everything has shifted and changed,” Price said. “Our conversation has to be big and bold and bright and future-forward. It can’t just be like, ‘How do we pencil out this one building on this one block?’ It’s got to be bigger than that.”