Bluelofts Launches Fund for Office-to-Resi Affordable Apartments

One of the most active players in Dallas’ office-to-resi movement is launching an investment fund aimed at the affordable housing crisis.

Dallas-based Bluelofts, led by co-founders John Williams and Ike Bams, aims to raise $100 million to convert empty office space across multiple markets into 3,000 workforce housing units, the Dallas Morning News reported.

The Bluelofts Middle Income Housing Fund will convert office buildings into apartments whose units are half market-rate and half designated as affordable.

The firm plans to seek tax incentives and grants for conversions developed through the fund.

The Biden administration has called for the acceleration and funding of office-to-residential conversions across the country. The Department of Transportation released guidance in October on how $35 billion in funding could be tapped for conversions near public transportation.

“We believe there is a huge need for workforce housing for police officers, teachers, firefighters — regular people who have a job but cannot find any place to live,” Bams told the outlet. “We also believe that with the excess supply of the office buildings there are incentives available to convert them to provide more housing.”

With the struggling office market and cities lacking affordable housing — Dallas alone needs about 20,000 more affordable units — institutional investors are already showing interest, Bams said.

Bluelofts has five years of experience with office-to-residential conversions in Dallas, Fort Worth and Cleveland. It has nine conversion projects in the pipeline, situated in downtowns or areas just outside of central business districts, the outlet said.

The firm acquired adjacent downtown Fort Worth landmarks — the Oil & Gas and Star-Telegram buildings, at 307 and 309 West Seventh Street — earlier this year, with plans to transform them into apartments.

As North Texas grapples with record-high office vacancy rates, Bluelofts’ venture is part of a broader trend among real estate developers and cities exploring the conversion of empty offices into rental units. Notable conversion projects in downtown Dallas involve the Santander Tower, Energy Plaza and Bryan Tower.

—Quinn Donoghue