In New York, many more residents may soon be living where someone once worked.
The announcement last month that the Chetrit Group plans to convert a portion of the Sony Building from office space to residential condos is part of a wider trend, reported Real Estate Weekly. Brokers and appraisers told the Weekly that skyrocketing prices and higher returns on condo sales relative to commercial operations are driving the conversion craze.
The trend could lead to a dearth of affordable office space as developers set their sites on Class B buildings, brokers.
“New opportunities for development are going to expand and draw space away from commercial use unless there is a significant uptick in commercial rents,” appraiser Jonathan Miller of Miller Samuel told Real Estate Weekly.
A number of brokers told the Weekly that a few factors can prevent developers from converting offices into condos, such as lack of natural lighting and floor plans with too many hallways and corridors. [Real Estate Weekly] — Tom DiChristopher