As occupancy rates continue to struggle to rebound from the pandemic, many commercial building owners are opting for other options. Converting largely empty office buildings into multifamily space is one of the hottest commercial real estate trends these days. It’s a trend expected to continue over the next several years, as well, as occupancy continues to decline.
The iconic Flatiron Building in New York City is the latest high-profile example of this commercial office trend. The building has had a rocky few years, according to the New York Times. Its lone tenant, Macmillan Publishing, moved out right before the pandemic, then a failed sale, and now a new owner, the Brodsky Organization, is planning to convert the 121-year-old building to about 40 condos within the next three years. The building’s odd shape make it a tough sell for modern office design, but that same quality make it desirable for condos, according to Curbed.
In Chicago, a similar story of low occupancy rates in office buildings is leading to a movement to convert office building into affordable housing. The occupancy rate in Chicago hit an all-time low in Chicago in 2023, according to Insider. A new plan – The LaSalle Reimagined Initiative -- calls for converting 5 million square feet of space along LaSalle Street to 600 affordable housing units.
Greg Zimmerman is senior contributing editor for FacilitiesNet.com and Building Operating Management magazine.
