Innovative Approach to Conversion Opportunities
Our innovative approach to identifying potential office-to-residential conversion opportunities hinges on a comparative analysis between the existing office space and the area necessary to maximize the number of residential units permissible under zoning regulations.
Environmental Considerations
This implies that if demolition and new construction are required, it would result in a considerable waste of energy, materials, and contribute negatively to the carbon footprint. We will delve deeper into this aspect shortly.
Compliance with Zoning Regulations
Additionally, this method suggests that if a city's zoning regulations permit such residential units, acquiring the necessary permits for the conversion should not pose a significant challenge, as the units are already in compliance with zoning laws.
Potential for Conversions in Miami
In Miami, there are 205 office buildings that align well with the potential residential unit zoning allowances. We believe that this is a crucial metric for gauging the likelihood of successful office-to-residential conversions.
Breakdown of Qualified Buildings
Here is a breakdown of the 205 qualified buildings based on their size:
136 are small, capable of yielding 50 units or less.
39 can yield between 50 and 200 units.
30 have the capacity to yield over 200 units.
Small office buildings constitute 66% of the total qualified stock.
Insights from "Converting Brown Offices to Green Apartments"
I recently came across an insightful white paper titled "CONVERTING BROWN OFFICES TO GREEN APARTMENTS," which advises against converting office buildings smaller than 25,000 SF due to the lack of scale economies for conversion. Such projects may be attractive for smaller conversions but are unlikely to attract institutional capital. The administrative cost-benefit analysis of approving or subsidizing small projects may be unfavorable as well.
Streamlining the Permitting Process
Nevertheless, I am intrigued to consider whether our qualification method, given a building's compatibility with the required area to accommodate the permitted units, could streamline the permitting process compared to attempting to convert an office building in a zone that does not permit multifamily residences.
Financing and Profitability
Regarding the financing aspect, it is imperative for the project to demonstrate profitability to secure funding. The demand for housing is indisputable; the challenge lies in optimizing the conversion process to achieve financial efficiency and, consequently, a substantial return on investment.
