Remember back when the pandemic was starting and there was a lot of talk about office buildings being empty due to remote working and at the same time there was a real estate crisis starting to unfold? At this time, many people put two and two together and suggested that we convert the unused office spaces into residential units. This was a great idea and prediction, in theory, but there are three main reasons why this won’t work, and here’s why.
Layout & lack of windows
First of all, commercial buildings are not designed with residential use in mind. These are known as deep floor plants, they’re large buildings with a variety of office spaces with most of the space being centrally located within the building. Most, if not all, residential codes for buildings require that there are egress windows or daylight windows. Bedrooms and main living spaces have this same code requirement, as many offices and cubicles are internal and do not feature direct windows. You may be able to see a window from an internal cubical because there are no permanent walls to directly divide the space into rooms. If you were to add walls, the access to windows would be removed from the room. The lack of internal windows is an immediate dealbreaker for converting commercial space to residential.
Separation of space
The second reason has to do with the patchwork and abandonment of the commercial space. For example, say there’s a 20-story commercial building that has open floors that could, theoretically, be used for residential units. However, the businesses may still be using other floors of this building for commercial use, meaning, only some of the building is for commercial use. You can’t convert half of a building from commercial to residential if part of the space is still being used for commercial purposes. You may be able to relocate the tenants, but as we mentioned above, if the layout and lack of windows are against the residential code, the space can not be converted for residential use.
The final reason has to do with the mechanics and the utilities of the building. When you have a commercial building, you can have one large heat pump for the whole building or one cooling system for the whole building. Once you start planning for residential, you have to have separate electric meters, separate heating and cooling, separate water, and separate plumbing for all of the units. So now, you have to run pipes, wire, and ductwork to all of these separate units. The cost to do this may be more than you’ll ever make back in renting these properties because commercial rents are higher than residential rents. The buildings are simply more expensive to produce and maintain, although sometimes the two rents are closer together. The cost to rewire, redo plumbing, and add ductwork can add up to an astronomical amount, especially if existing work needs to be removed or redone.
So converting a commercial building to a residential building isn’t as easy as adding a few bedrooms. Commercial buildings were designed to be commercial and typically do not have the infrastructure needed to convert to functional residential units. These factors aren’t the only ones inhibiting commercial space from converting to residential, but they are the main problems that contractors face in this situation. Before converting a commercial space to a residential space, consult with your local zoning board to learn more about the codes and restrictions for your area.
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