4 Office-to-Multifamily Conversions Done Right
How these developers tackled some unique challenges.
Adapting obsolete workplace inventory into much-needed housing is a no-brainer at first glance. The industry quickly found out, however, that the feasibility of office-to-residential conversions can be a tricky matter.
Even so, the pipeline seems to be at a tipping point, with activity on the rise. From 2021 to 2024, the number of apartments scheduled for conversion from old office spaces was up from 12,100 to 55,300, according to RentCafe. Office-to-apartment conversions now represent more than one-third of the roughly 150,000 apartments in future adaptive reuse projects.
While most prominent in New York City, Dallas and Washington, D.C., the trend is present almost everywhere. Each potential conversion needs to be evaluated in terms of infrastructure, floorplan configurations and neighborhood.
New formulas and tools are being rolled out by Gensler and others to help developers assess window-to-core distance, apartment layouts and other factors that can make or break such projects. More recently, CommercialEdge launched a Conversion Feasibility Index, which provides property-level scores. Everyone wants to figure out how many needles are in that haystack.
Manhattan Makeover
55 Broad Street, New York City
PROJECT AT A GLANCE
Owners/Developers: Metro Loft, Silverstein Properties
Architect: CetraRuddy Architecture
Size: 30 stories; 410,000 square feet
Unit mix: 571; studios to three-bedroom units
Expected completion: Summer 2025
Noteworthy: Goldman Sachs occupied 55 Broad Street from 1967 to 1983.
Over the years, Metro Loft has seen New York City’s Financial District transform from a purely office-driven area into a residential destination. From access to green spaces at Battery Park to the waterfront location and great transportation links, it has the elements of a coveted place to live, noted Mitch Wasser, chief marketing officer at Metro Loft. “We are very bullish on the neighborhood and believe strongly in it,” Wasser doubled down.
In 2023, Silverstein Properties and Metro Loft Management bought 55 Broad Street from the Rudin family for $172.5 million. The property was just 60 percent occupied. The Rudin family retained an equity stake in the project, while funds managed by Ares Real Estate acquired preferred equity.
The developers are working with CetraRuddy to turn the building, which was designed by Emery Roth & Sons, into 571 apartments ranging from studios to three-bedroom units. Rents are expected to be between $4,000 and $10,000.
“We were able to negotiate with all existing tenants to find new office space at better deals. This became a massive advantage because now we’re so far ahead of our timing,” Wasser added.
The building’s main tower is, atypically, not very deep, making it ideal for residential layouts, because it naturally invites an abundance of light and air. These two things are often hard to come by.
“Metro Loft’s construction due diligence is impeccable,” said Joseph Jebran, a principal at CetraRuddy. Installing new windows that were ADA compliant was a big job, but it was an easy swap.
“We are targeting LEED certification, so we’re keeping some existing materials,” added Jebran. “In the lobby, specifically, we are working our new design around the floor and marble walls. This is beneficial for the client and, from a sustainability point of view, it’s very efficient.”
In terms of leasing, 55 Broad Street’s million-dollar rooftop view is hard to beat. “With the swimming pool, it’s an incredible amenity space,” noted Jebran.
Urban Utah Jewel
Seraph, Salt Lake City
PROJECT AT A GLANCE
Owner/Developer: Hines
Architect: Hickok Cole
Size: 24 stories; 220,000 square feet
Unit mix: 217; studios to three-bedroom penthouses
Expected completion: Late 2025
Noteworthy: South Temple Tower (Seraph) was built in 1966 as the University Club Building. It was the tallest skyscraper in downtown Salt Lake City until the 1970s.
Utah has had the second-highest population growth in the U.S. over the last decade. And same as most of the U.S., housing is undersupplied—especially in Salt Lake City. With its 2022 acquisition of South Temple Tower, Hines stepped in to address the gap. The developer embarked on its first office-to-residential conversion rebranded as Seraph, a luxury property with 217 apartments.
“As a local resident, I’ve watched the office market shift and the residential market pick up speed since the dawn of the pandemic,” said Dusty Harris, senior managing director with Hines.
The property is close to downtown and its amenities, including City Creek Center, Temple Square, the light rail and major employers.
“While the high-end office product is performing well, mid- and lower-tier offices need to be repurposed or converted,” Harris noted. “However, we need to look at conversions practically. This building was struggling as office for many years. Largely, this was due to a small floorplate that made space planning difficult. This office building weakness is actually a strength for multifamily.”
After extensive analysis, South Temple Tower met requirements, including walkability, natural light, shape of the building, number of potential units and overall floorplan, according to Harris.
Construction began in 2023, with design by Hickok Cole Architects. The building is being stripped to its core and shell.
“Hines pursued the conversion for many reasons, including the following physical attributes: small (12,000-square-foot) floor plates; a center core that allows for planning all the way around the building and access to all sides of the building from the elevator; an ideal parking ratio; and 10-foot ceiling heights,” Harris added.
Metroplex Magic
The Sinclair Residences, Dallas
PROJECT AT A GLANCE
Owner/Developer: Todd Interests
Architect: HKS
Size: 49 stories; 1.2 million square feet (apartments + 450,000 square feet of office space)
Unit mix: 293; studios to three-bedroom units
Completed: February 2024
Noteworthy: Energy Plaza Tower was designed by Pritzker Award-winning architect I.M. Pei
Dallas got a head start in the early 2000s, with some developers taking advantage of historic tax credits to redevelop architecturally significant office buildings. The tradition continued. Todd Interests, a leader in the space, has transformed more than 4 million square feet of office into hotel, residential or mixed-use space.
Todd Interests purchased Energy Plaza Tower in 2022, together with Moriah Real Estate and Zurich Alternative Asset Management. Brasfield & Gorrie was the general contractor. Caroline Todd Interiors also worked on the project, as well as HKS.
Revamping the former Energy Plaza Tower cost $300 million. The vacant lot next door could accommodate a precast parking structure, according to Zack Lamp, studio practice leader, commercial/mixed-use, HKS.
“Another advantage was the depth from the building core to the exterior wall, which was smaller than the current-day office but ideal for apartments,” added Lamp.
Of course, the mechanical system needed to be updated. “This is a major expense, but it’s critical to the comfort of any resident as the Texas summer is hot,” observed Lamp.
Adding balconies to an all-glass office building for 30 percent of the rentable units was challenging too. However, the solution to only have it at the corners created not only a more activated exterior skin for the building, but also a covered outdoor balcony space. It is sizeable enough for outdoor dining or an outdoor living room—a feature that gives Sinclair a leg up.
Prized LA Living
Gemma Apartments, Los Angeles
PROJECT AT A GLANCE
Owner/Developer: Jamison Properties
Architects: Corbel Architects, DFH Architects
Size: 13 stories; 231,922 square feet
Unit mix: 206 units; studios, one- and two-bedroom units
Completed: April 2022
Noteworthy: Structural Engineering Excellence Award winner
Jamison Properties has an appetite for conversions. In August 2007, the developer purchased 3540 Wilshire Blvd. for $37 million. The Koreatown property, now known as Gemma Apartments, is an artful transformation of a 1957 Class B office building into upscale multifamily.
Corbel Architects, DFH Architects and Labib Funk + Associates worked on this two-part project completed in 2022—an adaptive reuse of the steel office building at 3540 Wilshire (Phase I) and the rehabilitation of an adjacent two-story, 1950s non-ductile concrete parking garage (Phase II).
Jamison enlisted a team to breathe new life into the existing structure, according to the National Council of Structural Engineers Association, whose judges selected Gemma Apartments for a Structural Engineering Excellence Award in 2022. The project thoroughly upgraded the building and preserved its steel-framed structure while maintaining the original building’s mid-century character.
“The biggest issue on most of our office-to-residential conversions is we need to upgrade the seismic structure,” said David Seongbae Kim, principal with Corbel Architects. The team didn’t use steel frame building concrete for this. “We employed a bracing system, which is actually putting the diagonal bracing in between columns. That was a very interesting way of strengthening the building against earthquakes. It (made this) a very unique project.”
Another unique aspect of the project is the four-story, wooden-frame parking structure added behind it, according to Kim. This garage added five floors of construction, plus a new concrete podium deck to the existing structure and 125,000 square feet of residential space, including 123 live/work units, a courtyard and a rooftop amenity deck.