While converting it is not economical, class c office space (which is least desirable) demand is probably gone in this market due to lackluster demand for office space; the value of the building will get zeroed out by the market, at which point it can trade hands, be demo'd, and new residential can go up in its place.
You can think of class c office space, broadly speaking, as oil wells that have very little life left, and get bought up by folks who intend to extract the cashflow until they dump the externality on the public government and taxpayers (like abandoned shopping malls).
A recent example in St Louis is the AT&T office tower [1] [2].
[1] One of St. Louis’ tallest office towers, empty for years, sells for less than 2% of its peak price - https://www.costar.com/article/642008108/one-of-st-louis-tal... - April 10th, 2024 ("Goldman Group buys 44-story former AT&T office tower for $3.6 Million")
IIRC, that article mentioned older buildings tend to be more convertible to residential, because of their layouts, and modern office buildings (with giant open floor spaces for seas of cubicles) are almost impossible to convert.
There should probably building code changes to ban the latter type of office building, and keep the space more flexible and convertible to residential. A big plus is the resulting office space would probably be nicer to workers.
I read something at some point that it's more expensive to convert these into residential buildings than it is to literally demolish and rebuild.
I'm not entirely sure how that math works out, or why, because one would think it couldn't be that complicated. Maybe someone here knows more about this.
Another thing about a lot of commercial buildings is the floorplate size and layout. Office buildings often don't care if there's a lot of interior spaces without any windows, but people need outside light. So if you've got a massive floorplate it can be kind of a pain chopping it up into good sized units that meet the demand of the residential market in the area. This definitely varies from building to building though.
There's also a lot of work that probably needs to go in to the ventilation and fire code changes. An office building isn't designed for people having ovens and stoves. It also often just assumes its OK to have less isolation between units for the ventilation, or previously entire floors were considered to be one space ventilation-wise but now you might be trying to split it into 2-3 units that require separation. This separation can also complicate things like AC and heat.
The ventilation issue comes up a good bit with a lot of these poorly done conversions. You end up with units that just don't get nearly enough airflow, and all the windows are sealed so its not like one can just open the window to get more air.
The plumbing systems in commercial buildings are not big enough to handle residents usage. Residents use more water and the outbound sewage systems need to be larger.
There's already enough plumbing in there for a whole office to shit when they get to the office.
History favors the bold, and code inspectors blabbering about "written in blood" don't see all the homeless people they kill via reduced access to housing.
I've seen plenty of artist collectives that manage it; on paper they are office/industrial but actually everyone lives there. Every once in awhile one burns down but the mortality rate isn't as high as living on the streets which is ultimately what happens to those on the bottom of the socio-economic pyramid when the ones higher up push the ones under them down a rung to snag housing.
For a lot of the office buildings I've been in, there aren't that many toilets per floor. Its also different when you've got some toilets that are often unused compared to people running laundry, cooking, bathing, etc. Very different demands on the plumbing system.
You also then had everything pretty much isolated to two rooms for an entire floor meanwhile now every unit is going to have a separate kitchen, a bathroom (or two, or three), a laundry room, etc.
And you're going to need a good bit of engineering studies done before you start cutting that many holes in the floor.
Ok, but some extra plumbing (and whatever sorts of engineering studies referred to) and electrical work surely can't as expensive as demolishing and rebuilding a whole building.
If it was just the plumbing, then maybe. But its not just the plumbing. Its the plumbing, the electrical, the AC/ventilation, fire codes, and so much more.
Not saying it can't ever be done, it really depends on the building. But its not necessarily a good assumption it can be done well in a cost-effective fashion.
But do you really have to cram in as many residents as you could with a purpose-built tenement? There must be ways to keep headcount in the range the infrastructure can support and still provide a lot more housing than just leaving them as empty decaying offices owned by the last one holding the bag. Intersperse flats with windowless storage units (you have a depth problem anyways), low density commercial use like workshops with live-by flats and so on. Large units designed to attract high squarefeet/low headcount tenants, not bunk bed families. Add regulation only as a fallback limiter. Don't let perfect be the enemy of good.
> There must be ways to keep headcount in the range the infrastructure can support and still provide a lot more housing than just leaving them as empty decaying offices owned by the last one holding the bag.
Demolishing the office building and building a residential building is more profitable often.
I mean, sure, you can just sell it as a unit for each floor. You then need to recoup all the costs of rebuilding against fewer people, so all the main area renovations and what not get more expensive and the monthly cost of building maintenance get spread across fewer and fewer tenants. But you've still got a problem of most of the rooms of your very expensive condo have zero natural light, its all practically ancient built stuff in terms of planned structure life, and you've got a very expensive monthly maintenance bill. Meanwhile your massive and dark unit with odd plumbing and low ceilings is competing in the market against units that were actually built for the purpose of people living in them, so while your unit is big and expensive to maintain they're some of the least desirable spots.
The economics just often work out a lot better to tear down the old structure and rebuild a new one more fit for purpose.
Sorry, I either totally misread your comment or was mentally replying to someone else when I wrote this.
Sure, you could just cram the residences to the edges and try to recoup the cost of the rest of the square footage for places that don't need natural light. But once again you've got issues with original designs and intents for the building. None of the plumbing is designed to be pushed to the edges, so you'll need to make massive changes to the structural integrity by drilling a bunch of new floor cores to do all the new plumbing work. You could rent the interior spaces as storage, but you'll probably quickly flood the market of storage units with the massive amount of square footage you'll be bringing.
Trying to have industrial in there as well is asking for problems. Trying to rent some 15th story small/medium interior unit as some kind of industrial workshop would be quite weird. What kind of industry would want a smaller interior space that probably can't support heavy equipment, has a limit to ceilings of ~10 or so feet, can't require odd ventilation or strange/additional fire suppression/separation requirements, probably has significant power limitations (in terms of industrial capacity, at least), noise limitations, difficulty getting much product in and out, etc? Stuff that the city is going to be OK zoning literally across the hall from people trying to live? And that you're going to find a number of these willing to pay a good bit for such a space to cover the maintenance costs? These buildings weren't built for industrial usages, they were built for office desks and couches. Maybe a few floors have been upgraded to handle additional weight to have datacenter kind of spaces, but definitely not most of the floors.
So then you're trying to spread the maintenance costs of this massive and old building across higher value residences and a lot of very low value storage/weird industrial tenants.
You can run drains out the side of the structure without drilling holes in the floor, same with electric, and even if by some insanity we say "whutabout the holes in the side" then you could even use a damn lift pump/macerator pump to pump it up and out through where a window was. For vents you can also use AAV instead of a traditional vent. If the residences are at the edges they should be able to pop right out and worse case you elevate the floor in the bathroom/kitchen under the plumbing appliances for the slope on the pipe as it exits. A vertical drain pipe isn't going to freeze (and even if it were, could be insulated and heated), and supply lines are such small holes as to not threaten structural integrity.
> And you're going to need a good bit of engineering studies done before you start cutting that many holes in the floor.
You can Swiss-cheese a pan and deck concrete floor with core-drilled holes, the important thing is GPDR scanning before coring to avoid the pre- or post-tension cables embedded in the concrete.
Artists are a shrinking population, I wonder if having most of the top floors (20 out of 30) converted to extremely large luxury apartments (5000sqft+) and only 'adding capacity'to plumbing and what not for the lower 10 floors, which would house smaller units, would be economically viable. Although actual luxury market requires high ceiling so probably wouldn't work out.
I'm sure many many people have thought of all sort of solutions as the value for finding some sort of solution is extremely high.
> There's already enough plumbing in there for a whole office to shit when they get to the office.
A 20,000 sq ft office tower floor will usually have a single set of restrooms and a couple of kitchen sinks, maybe a dishwasher, plus a couple 6-gallon or instahot water heaters. If you subdivide that floor into a dozen units, that’s 12 showers, 12 washers, 12 dishwashers, 12 toilets, 24 sinks, and 12 water heaters.
The riser and drain pipes aren’t big enough to handle residential needs.
That's not how the 'black market' ones I've seen operate. And I've seen a lot from when I visited the circuit of underground artist-related events when I lived in chicago. They are shockingly common in areas with extremely high rents and an oversupply of unused commercial space.
They might subdivide it 12 ways, but there is one shared kitchen for a whole floor and maybe 2 toilets, 2 sinks and the residents are going to the laundromats. They tend to put the shared amenities on the ground floor as much as possible because it is easiest to expand them there. It beats being homeless by a long shot.
For reference, when I hauled water, we used about 60 gallons a week for a family, or about 0.05% utilization of a 3" drain pipe for a single family. You do not need much water in order to be way way better off than being homeless; 5/gal a day of non-potable water and you're pretty much in luxury comparatively and a shit-ton of people can be putting that down a 3" or even 2" drain pipe before it causes problems. A 3" pipe is the minimum that would be serving a typical floor of a warehouse, so plenty enough for a constantly used couple of shared bathrooms with a shared kitchen. Honestly even splitting it 12 ways could be overcome with some technical ingenuity (electric lock-outs to prevent more than a few in use at once, and AAVs to prevent needing a bunch of new vents).
These are all easily overcome problems for people utilizing an ounce of civil disobedience with regards to the code. And yes I have personally done all the design and plumbing and electric for multi-structure properties (though not the black market ones).
> These are all easily overcome problems for people utilizing an ounce of civil disobedience with regards to the code. And yes I have personally done all the design and plumbing and electric for multi-structure properties (though not the black market ones).
It didn’t work out so great in Oakland at the Ghost Ship, 36 people died in a similar arrangement.
Building code is written in blood, things are done a certain way for a reason. You may be morally or ethically against them but following code saves lives.
36 people dead is a rounding error compared to mortality from people on the streets due to lack of access to housing. Every time I bring up this topic, someone trots out the Ghost Ship like a broken record, ignoring what I said about the mortality rate of people on the streets because shit rolls downhill when people higher up the socio-economic pyramid go the next rung down in available housing. Bastiat has an excellent writing on this fallacious logic you use, titled "That Which is Seen, and That Which is Not Seen."
Not having housing didn't work out great for 700+ dead homeless people per year that are estimated to die of hypothermia.
The code inspectors have blood in their hands. You may be morally or ethically against bypassing the codes, but bypassing it can save lives.
Black market housing is done for a reason, a very good one, and one that saves lives. Fortunately where I live, I built a house without any inspections whatsoever, so none of the code psychopaths were even around to make their absurd case about the ghost ship, and that is the only reason why I was even able to afford to own a house.
This is an issue that got brought up in Portland, OR during Covid IIRC. The city was looking at buying up vacant offices and converting them to living space but it just didn't make any sense financially and the city concluded it was cheaper to demolish and rebuild than convert.
I assume it's because they would need to re-wire electrical and retrofit plumbing on a massive scale to accommodate kitchens and bathrooms for separate units. They end up needing to gut the entire building and cut through floors and ceilings without damaging any structural and load-bearing parts. It doesn't sound easy nor cheap.
>at some point that it's more expensive to convert these into residential buildings than it is to literally demolish and rebuild.
Yep, and that's fine. It's literally a tangible instance of 'creative destruction'. I see people arguing that oh, we have to RTO to save the current model and it seems so backwards to me.
Historically we did this with suddenly unused industrial buildings in cities. Liverpool and London's Dockland warehouses, New Yorks lofts in lower Manhattan.
When it is suggested today modern planners and developers say it can't be done. What changed?
Industrial buildings tend to be much easier to renovate, because they're filled with big open spaces.
Commercial office buildings are optimized for seating space, so you get a lot more interior walls already built and often shorter ceilings then industrial spaces. That's a lot more renovation to add in all the necessary plumbing for showers and toilets and often laundry in every unit.
New building codes mean that everything has to be done right to today's standards, not yesteryear's, so it becomes cheaper to demolish and rebuild than retrofit, especially if the building has a lot of interior space that doesn't have access to exterior walls for mandated windows.
Regulations. I have some small experience with this, although I'm not a professional developer. The regulations for residential properties, whether built for purpose or converted, make this very difficult (and therefore costly) in the UK and I presume other countries.
What modern planners and developers say is converting modern office buildings isn't cost effective often. Warehouses cost less to convert than high rise buildings. Most old buildings do not have large areas without natural light or ventilation.
