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NOTE TO REPORTERS AND EDITORS: Members of the media are invited to a webinar on the report’s key findings Wednesday, February 22, at 1 p.m. Eastern. Click here to register.
WASHINGTON (February 21, 2023) – Repurposing commercial properties into multifamily housing is growing more common across a variety of real estate markets and can provide a critical source of housing where shortages persist, according to a new report from the Urban Land Institute (ULI) and National Multifamily Housing Council (NMHC) Research Foundation. The feasibility of these projects is dependent on a number of factors including financing options available and physical limitations of the property.
The report – Behind the Facade: The Feasibility of Converting Commercial Real Estate to Multifamily – is based on interviews with the developers of nearly 30 commercial-to-residential conversion projects across the United States. Armed with insights from these interviews, ULI’s Center for Real Estate Economics and Capital Markets and NMHC’s Research Foundation created profiles of 24 developments that demonstrate the viability of converting old single-use office spaces, hotels, industrial properties, and more.
“Conversions have existed for decades, but the pandemic has accelerated their growth potential by rendering more commercial properties obsolete,” said Anita Kramer, one of the authors of the report and senior vice president of the ULI Center for Real Estate Economics and Capital Markets. “Our research demonstrates that there’s no ‘cookie-cutter’ formula for executing a successful project. But we do hope the insights that experienced developers shared with us can provide valuable guidance to newcomers in this expanding market.”
“Commercial-to-multifamily conversions can be one of the ‘all of the above’ solutions we need to the nation’s affordable housing crisis,” said Caitlin Sugrue Walter, NMHC’s vice president for research. “This research helps housing providers and policymakers better understand when these conversions make sense. NMHC supports enacting federal tax incentives to greatly expand the universe of properties where these conversions are financially viable and could add much-needed new housing.”
Key observations include:
A comprehensive discussion and analysis of Behind the Facade will be presented during a webinar on Wednesday, February 22. The webinar will feature commentary from Caitlin Sugrue Walter, vice president, research, National Multifamily Housing Council; Nick Brumback, president and managing broker, Brumback Inc.; Mark Rivers, executive vice president, LOWE; and Rob Kerns, development division chief, City of Alexandria, Va. You can register for the webinar here.
The full report can be found on ULI’s Knowledge Finder.
The Urban Land Institute is a non-profit education and research institute supported by its members. Its mission is to shape the future of the built environment for transformative impact in communities worldwide. Established in 1936, the institute has more than 45,000 members worldwide representing all aspects of land use and development disciplines. For more information on ULI, please visit uli.org, or follow us on Twitter, Facebook, LinkedIn, and Instagram.
About the National Multifamily Housing Council
Based in Washington, D.C., the National Multifamily Housing Council (NMHC) is the leadership of the apartment industry. We bring together the prominent owners, managers and developers who help create thriving communities by providing apartment homes for 38.9 million Americans, contributing $3.4 trillion annually to the economy. NMHC provides a forum for insight, advocacy and action that enables both members and the communities they help build to thrive. For more information, contact NMHC at 202/974-2300, e-mail the Council at [email protected], or visit NMHC’s Web site at www.nmhc.org.