With the discount end of the office market shuddering, it’s time for Boston Mayor Michelle Wu and state legislators to be as aggressive as possible in encouraging office-to-housing conversions downtown. 

As Steve Adams reports, a near-record share of the city’s class B office space is vacant: more than 1 square foot in every 5. Some tenants are shrinking their footprints or doing away with physical office space entirely. Others are decamping for the city’s class A properties to take advantage of better deals on rent and amenities that make it worthwhile for employees to spend less time working from home. 

With construction costs high and carbon emissions on everyone’s mind, even partial conversions of downtown buildings represent a good deal all around. Shorter construction time frames versus ground-up construction mean lower carrying costs, and no need to build a new steel and concrete skeleton means far less carbon is emitted per new apartment or condominium. And, as Wu’s administration has pointed out before, more residents downtown mean a more vibrant downtown. 

Conversions have previously been a pipe dream thanks to the physical realities of most Boston office buildings, according to architecture firm Gensler. Only 12 percent of more than 80 downtown properties it surveyed had the right dimensions –floors small enough to let natural light into hypothetical apartments, and so on – compared to around 25 percent for most other North American cities. The buildings with the most potential locally are towers from the 1950s through 1970s that haven’t been recently updated, Gensler said. 

A gangbuster lab real estate market had also precluded any thought of residential conversions, thanks to the far higher rents that market commands. As a Newmark report released last week suggests, that may be waning, but it’s unclear if this is simply a momentary hiccup as economic jitters close off one source of easy money for biotechs eager to expand. 

This is all to say that although office-to-residential conversions may on paper be a good idea, especially when one looks beyond a building owner’s bottom line, the future of office real estate is highly contingent. 

It appears that Wu and Boston Planning & Development Agency Director Arthur Jemison take the idea of office conversions seriously, and amid its hiring struggles the BPDA tells Banker & Tradesman it is still committed to bringing a downtown planner on board soon to lead a neighborhood planning effort that will include these conversions. The agency also plans to commission a feasibility study on the subject this fall. 

But if the Wu administration wants to seize the moment, it would do well to fast-track any efforts to streamline zoning and permitting for residential conversions. Legislators and Gov. Charlie Baker should also strongly consider marshalling an array of incentives that don’t nudge building owners so much as give them a hearty push towards turning vacant blocks of floors into residential units. 

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Seize the Moment for Office-to-Residential Conversions

by Banker & Tradesman time to read: 2 min