Commercial office leasing in Seattle has been experiencing a downturn since the pandemic shifted many companies to hybrid and remote work. While some companies have mandated returns to the office, others have “right-sized” into smaller buildings to suit their needs for less physical space. With many companies moving away from large offices, some commercial towers are now candidates for a second life as apartment buildings.
The National Bureau of Economic Research (NBER) has determined that around 11% of office buildings across the U.S. are suitable to be converted to apartments. In Seattle, 91 office buildings have been identified as strong candidates for conversion.
The list includes notable high-rises like the Westin Building and Smith Tower, the latter of which was up for sale earlier this summer. Most of the buildings listed are smaller office complexes;. in total, the 91 candidates add up to a total of 6 million square feet. This would be an impressive potential addition to Seattle’s short housing supply.
However, for this to be a profitable endeavor, developers would need to obtain the properties at a revised fair market value, along with subsidies and tax abatements from local government to help fund the projects.
There are currently no plans in Seattle to convert any vacant office buildings to apartments, but the Seattle Office of Planning and Community Development did run a competition for architects and builders to explore office-to-apartment conversions as a hypothetical. The winning design proposed turning the Mutual Life building into 80 co-housing units.
With the value of office space in Seattle noticeably deprecated since the pandemic, finding new ways to use the space and recoup costs could help builders and building owners avoid going into foreclosure. Additionally, it would provide much-needed residential space in a city where housing is in constant high demand.
This article was sourced from Puget Sound Business Journal.
