Case Study: Market Analysis and Development Recommendations for the Conversion of Office Space into Rental Apartments
- Market Analysis
- Office to Residential Conversion
- Rental Apartments
BentallGreenOak (“the Client”) owned an approximately one million square foot office building (“subject site”) in a Northeastern U.S. market that provided strong access to retail and transit. An anchor tenant recently vacated the top few floors of the building, leaving roughly 200,000 square feet available for either re-tenanting or redevelopment. A particularly compelling scenario, given the rise of remote work and the decreased demand for office space, was the conversion of the vacant space into residential apartments. Against this background, RCLCO was engaged to conduct a market analysis to help the Client understand the optimal program and achievable pricing for rental apartments in the building should they decide to move forward with the conversion.
After assessing the economic and demographic trends in the overall market, RCLCO turned to the competitive landscape, identifying other rental properties in the area that provided a useful comparison to the subject site to provide insight as to what the market is doing in terms of finishes and amenities, and how they are being paid for it. In addition, RCLCO assessed the target market and quantified the depth of each market segment to better understand how the subject site should position itself for its anticipated audience, helping RCLCO determine the optimal mix of unit types and sizes as well as the ideal price point for the monthly rents. Finally, the Client was also interested in how the location of rental apartments within an existing office building would influence the demand and achievable pricing. To answer this question, RCLCO employed the case study method, examining other office to residential conversions to ascertain whether a premium or discount existed for product of this type.
RCLCO’s analysis of the rental apartment opportunity at the subject site allowed the Client to weigh the pros and cons of converting the existing office space into residential space instead of re-tenanting.VIEW MORE CASE STUDIES