After producing a white paper on hotel conversions (Steinberg Hart, 2021), “what we're recommending to clients,” Hart says, “is, don't shy away from this as a concept, but just do a rapid assessment.” Instead of hiring large teams and spending months evaluating a single site, he recommends small teams exploring multiple properties. “In three weeks, you'll have enough information to do your due diligence and say, 'Yeah, we want to move forward with this or not.'...Don't look at one building and spend months looking at one building. Look at 10 buildings, and look at all of them on a comparative analysis in a two- to three-week period, and then buy two, or buy one, and then move forward.” Although some clients still conclude that the buildings are overpriced and shy away from sunk costs (either land or buildings), he says, “that's not to say we won't see it. I think we'll see an uptick in this, and we're very interested in doing more of this type of work. But I don't think it's the radical transformation of our built environment that I think some of the conversation around it has that I've heard over the last six to 12 months as a result of the hybrid-work scenario.” Developers' hesitancy can stop a good idea in its tracks, he finds: “Architects like to talk about architecture, but there's no project if there's no project.”

THE “FLIGHT TO QUALITY” AND THE NEEDS OF HISTORY

In 2021, journalist Justin Davidson (writing for New York magazine's urban-environment section Curbed) challenged Architectural Research Office (ARO) to develop a residential conversion plan for a mid-Manhattan office building, 260 Madison Avenue, testing then-governor Andrew Cuomo's proposal to create conversion incentives through zoning revisions in designated parts of the city (Davidson, 2021). The premise of ARO's thought experiment was that class B and C commercial buildings, lacking the panache of newer class A spaces and, in some cases, lacking appropriate maintenance, could find a second life as residential or mixed use, given “a few nuanced regulatory tweaks.” Though some in New York City's real estate community remained skeptical about the project's economic plausibility, a development executive signed off on the numbers, at least on a “smell test” basis. The transformations were substantial, including relocating volumes, constructing new components out of mass timber, and adding a high-performance facade; the resulting mixed-use design appeared sustainable and livable.

ARO, says Bafitis, “took this conventional mid-20th-century wedding cake building where it's really fat on the bottom and it gets skinnier on top, and they took portions from the bottom and elevated them higher, which made a lot of sense because you reduce the floorplate on the bottom, where you want to do it, and you increase it on the top, and they created a mixed-use building, energy-efficient. They gave a template of how it can be done physically and even aesthetically.”

Historical precedent for this hypothetical conversion and rising numbers of real ones exists in the form of the Lower Manhattan Conversion Program (1995–2006), a.k.a. the 421-g Tax Incentive, which offered real estate tax abatements and other motivators for conversions in the Financial District, which helped downtown Manhattan evolve from a nocturnally deserted commuter district into a true community with around-the-clock amenities. This measure, in turn, rested on precedents for manufacturing-to-residential conversions in the nearby SoHo neighborhood, where artist-activists from the 1960s onward started a movement that catalyzed two amendments of the state's Multiple Dwelling Law allowing artists to live in converted manufacturing spaces, then a 1982 Loft Law opening that model to broader populations. It is not hard to extrapolate from past changes to future policy shifts that may accelerate today's trends, particularly with the New York City's Office Adaptive Reuse Task Force releasing new recommendations for expanded regulatory flexibility and tax incentives (NYC Department of City Planning, 2023), and with more cities choosing similar approaches.

Charles F. Bloszies, an architect, structural/civil engineer, educator, and writer based in San Francisco whose firm emphasizes urban infill and historic preservation, concurs with Bafitis's caveat that assumptions about the economics can be unrealistic. “Everybody says, 'Well, it's an existing building; it's going to cost less to refurbish it than to build new.' That's actually not true,” he comments. “It costs less to build new and faster and more predictable than tearing apart an existing building and doing a major conversion.”

In conversations with contacts in California's brokerage and legal fields about potential conversions through the pandemic period, Bloszies has noticed that their position has adjusted from initially dismissing the idea as too expensive. “It doesn't make sense. We're waiting for the office market to rebound”─to a more nuanced and flexible tone: “Well, we're worried that we're not going to see a rebound.” The Bay Area is heavily reliant on tech offices and well supplied with buildings dating from shortly after the 1906 earthquake and fire, noted for high ceilings, operable windows, views, and charm: exactly the blend of features that are conducive to residential conversion. “I think if the economics can be worked out and the politics can be worked out—and that's not simple—that this is bound to happen,” he says.

With business leaders pessimistic about downtown San Francisco's economic comeback, many firms are adopting hybrid work-from-home arrangements requiring less office presence, and “what most of the big players are doing is what's being called a flight to quality," says Bloszies. "They're downsizing their real estate footprint, but they're going to class A buildings with services that would be more attractive to their workforce. And the consequence of that is the class A buildings here, the high-rise buildings like the Embarcadero Center, Salesforce Tower, all our big skyscrapers, are really not suffering the economic consequences that the smaller buildings are.” Those class B and C buildings, located in or near downtown, and often owned by families or smaller investors, are prime conversion candidates.

Considering the area's high building costs, construction costs (around $700-800 per square foot), a lengthy planning process, and affordable-housing requirements, new construction in San Francisco has become rare. One broker told Bloszies, “In real estate, it almost never makes economic sense to do a development. The real window of opportunity has been maybe a year in my 30-year career.” There is also concern that the city budget's substantial reliance on commercial property-tax revenue creates public-sector vulnerability as property values fall. “If there could be some kind of incentive to keep them alive by converting them to residential, from the economic side and the broker side, that would be wonderful,” Bloszies comments, while raising the question of whether the political will to create such incentives is present.

Bloszies and colleagues have examined properties with high potential for conversion, singling out as particularly promising a historic four-story office building in the Jackson Square nightlife district adjacent to downtown with three sides of exposure, a relatively small floorplate, light exposure, and the potential for a “density and height bonus,” a provision originally aimed at adding affordable housing. With the necessary seismic structural upgrade (probably shotcrete shear walls to strengthen the original brick) and new elevators, Bloszies envisions adding several stories to the building, creating four residential units per floor. San Francisco, he says, has hundreds of similar buildings.

His prepandemic experience with converting the original Chronicle building by Daniel Burnham into a mixed-use building with a large residential component is a complex saga of sequential adaptations, expansions, and ultimately the recovery of a respected civic asset (see old Chronicle building case study and Figures 4-7). San Francisco's heritage of Chicago School commercial buildings also includes the Aronson Building (706 Mission), a ten-story office midrise recently expanded to a mixed-use complex combining luxury residences with the Mexican Museum (a modernist structure by TEN Arquitectos of Mexico City) and an adjoining 43-story residential tower of precast stone and glass, a joint project of Page & Turnbull and Handel Architects that provides structural reinforcement for the original Aronson. Designed by Hemenway & Miller (1903), it survived both the 1906 earthquake and the Loma Prieta earthquake of 1989 as well as several nonhistoric additions, now removed. With the rehabilitation component guided by Page & Turnbull, including repair of an elaborate facade including terracotta ornamentation, cornices of sheet metal, entries of Colusa sandstone, and cast iron pilasters, the complex offers a strong example of the reinvigorated past in dialogue with the present.

CONCLUSION

Transforming commercial spaces into residences, whether they originate as offices or as any other typology, is more than a business venture involving a single property. It is a step toward sculpting a neighborhood, ideally taken with an awareness that conversions can kindle changes with unforeseen effects, sometimes reanimating an underperforming building or aiding an underserved community, but also capable of straining local infrastructure or worsening the environmental burdens of development. Conversions represent calculated risks rather than panaceas. They are usually sui generis projects, and they have frequently depended on an economic or regulatory nudge from the public sector.

Bloszies compares such incentivization to changes in a local ecosystem that create conditions for gradual growth, “like the coral reefs that occur when a ship sinks, where it doesn't happen naturally. Something happens that's sudden, like a shipwreck, and then eventually a coral reef develops.” He is skeptical about sudden creation of dedicated districts and, instead, sees neighborhoods developing organically around “a series of small moves. I think large developments that are purporting to create instant neighborhoods almost by definition can't succeed. It has to happen organically, by accretion.”

McLane suggests a series of questions that Page & Turnbull applies to evaluate proposals: “If it's a historic building, is that one that can stand up to the changes that would be necessary, and does it meet our firm standards for appropriate treatment of a historic building? We follow historic preservation practices very closely, so if it's a building that's designated as a landmark, then it's a given that the building must be treated following professional standards. It might be a building where that isn't the case, and the developer might want to do something that is to us questionable. So then we have to decide: do we want to help this developer, or do we take a pass? We don't usually take a pass,” he continues. “We usually try to help a property owner reach their goals, and we give them our recommendations. They may not follow all of them....We are experts in historic preservation, and we not only can help owners understand how to get through the approvals process and how to design a project that will meet their market goals, but we think we can help them expand their vision, sometimes, of what you can do with a building.”

Weisz addresses the elephant in the living room: the tendency of conversions to date, despite their benefits reducing housing shortfalls and embodied carbon, to skew toward price points where cities least need them. “Once you have the right incentives, then saving buildings, whether it's for affordable housing or not, becomes a lot more feasible. If you're basically not getting any financing on the basis of saving a building, then it's going to be even harder, and therefore you really need to get paid back enough to cover your costs. It's really where we put our incentives in. In the old 80/20 program, I'm sure there are affordable apartments, even in adaptive reuse, where the financing was there for basically averting taxes for 20 or 30 years, and it's worth it. But there's no physical reason why affordable housing cannot be part of office conversion to residential.”

END NOTES

Bill Millard, is a New York-based journalist who has contributed to Architectural Record, The Architect's Newspaper, Oculus, Architect, Annals of Emergency Medicine, OMA's Content, and other publications.