Converting vacant office buildings into apartments

Transforming unused office buildings into urban housing could solve two problems rippling through the real estate world - if only it were so easy.
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[@raygv12]

Love how they showed contrast between the two developers. One developer complaining about how “work from home is ruining the real estate market” & the other developer shows how they adapt and innovates a way to meet today’s Market. 👍

[@tycooperaow]

This is the way

[@dhowto3005]

Maybe 60 minutes can do an update once the building is totally converted?

[@justinleemiller]

Even if they’re not affordable, that will take the pressure off of other neighborhoods that are getting gentrified

[@J3unG]

???? The report absolutely describes gentrification. You don't actually believe this will change the lives of poor people, do you?

[@209bornandbred]

Another thing that is also an obstacle for converting existing commercial high rises to residential is that multi-story residential buildings have a lot more building code requirements for safety. For example, if a fire breaks out at night in an office building, the code doesn't assume ppl are sleeping, but in an apartment building they would be, so there are many more fire separation requirements between units, at corridors, stair wells, elevator shafts ,etc. To allow ppl time to either get out or stay inside while fire fighters respond.

[@daveh3777]

They don't convert well in part because they don't have enough light. That says something about how healthy the environment is in all of those buildings that don't convert and reflects of the health of the population. I'm now in a new building where 30% of the walls are glass to a green space. It has altered my life in a physical and emotional sense.

[@chancepaladin]

no light, no bathrooms. :/

[@Tkenny35]

Turning office buildings into apartments is one of those things that sound like a good idea but cant really be done unless you have the RIGHT property. I saw a video where they wanted to do this with some high rises in SF but developers realize the conversion of office to apartments would cost them more money than building from ground up because you would really have to gut it to the point of it basically being a new construction and if thats the case they'd rather just do a new construction LOL

[@22ergie]

...OR UNLESS you have a $263 million loan as this guy did...@@Tkenny35

[@RamonAcosta191]

So basically demolished these buildings and rebuilt from the ground up. Work from home for administrative workers is here to stay. The world has changed forever. The COVID-19 pandemic accelerated the move to more efficient and effective work from home for those careers that can do it via the use of advanced technology. A benefit no one talks about due to this work from home shift. Is that local suburban businesses are striving with more demand from work from home employees. I now find myself ordering lunch a couple of times a week and going to my local restaurants and bars after work to get out of the house a couple of times per week. I used to stop by a bar once or twice a week in the city before going home to decompress. Now I do it locally in my suburbian town. My disposable restaurant, bar income has now transferred from spending it in the City around my job to spending it in my local suburbian town and I save several hundreds of dollars and 15-20 hours per week commuting. I will never take another job where I have to commute 2-3 hours per day.

[@adventuresinthebay8487]

People are different in their sensitivity to their environment. Some people can live in a dump and still be happy.

[@sct4040]

Mix used buildings might work. Apartments on the upper floors, and offices on the lower floors, or vice versa.

[@johnl.7754]

Might need two set of elevators 🛗 🛗 then

[@not_nostradamus683]

Many U.S. cities already have this. The issue then becomes zoning. An area that is zoned for commercial/office use only would need the zoning changed to allow mixed usage for lower level commercial/business and upper level residential. In Los Angeles, getting a root canal is easier than getting mixed use zoning changes through city planners.

[@nickelcrystals3165]

nope- it has been tried

[@gino14]

@@nickelcrystals3165 Where has it been tried and what went wrong with the attempt?

[@xonious9031]

@@gino14 SF

[@ItsJessdMe]

Key thing: “we are not talking about affordable housing”

[@mickjames666]

Agree over expensive apartments. 2,000-3,000 a month

[@DefinitelyNotRin]

They said the cheapest was 3,500 a month for a studio@@mickjames666

[@Steven-mm7gb]

If you can afford it is affordable.

[@GigachudBDE]

The housing crisis isni't about not having enough housing, it's about how unaffordable housing in general has become. In theory creatig more housing should make the supply/demand economics more favorable to this but the cost of actually building it is so astronomical that the only way to recoup their costs is to sell them for these crazy prices.

[@bobmcbobbington9220]

@@GigachudBDE No. It's literally because of supply and demand. People's rent increases are not because the apartment they were living in magically got more expensive to build, even though they're already there. And it is not that much more expensive to build, it's that you CAN'T BUILD, thanks to nimby culture

[@JomerTB]

A lot of commenters completely MISSED the point of this story. It's about converting downtown office buildings into urban housing. NOWHERE does it mention or talk about affordable housing. That's a completely different story for a different day.

[@everss02]

you'd need to make $275k/year+ just to afford the studio, how big can that market be? swapping from empty office space to empty apartments

[@Isynchromissity]

But they cite the housing crisis. You can’t use that argument then not address the elephant in the room. People can no longer afford housing.

[@TheMilpitasguy]

Maybe if they install supermarkets, dry cleaning and Starbucks on the ground floor of these buildings, it might work.

[@user-vo9wd6tx6c]

We desperately need more mixed use development.

[@paxundpeace9970]

Like we wouldn't have enough cleaning services in New York

[@paxundpeace9970]

Supermarkets are great

[@ValerieBottenus]

This is exactly what is happening. A Whole Foods is now open on lower Broadway right around the corner from Wall St. because of all of the residential living in lower Manhattan. There are plenty of stores in lower Manhattan all within a several-minute walk from this building on Water St., as well.

[@jonasga]

They don't need that, just take your helicopter to Jersey then hop your jet from Newark to Boston and shop there. People so over-value having food close by...

[@tommycahill7080]

$3500 for a studio 😂

[@anthonynelson6671]

I scrolled down to say just that! Housing costs in the USA must crash. The use of housing as a "line goes up" investment vehicle needs to be buried in the USA.

[@tek_soup]

yeh, that is funded by tax payers.

[@paxundpeace9970]

That is normal in lower Manhattan!

[@paxundpeace9970]

​@@anthonynelson6671how? Please explain Building costs are /were on the rise the past 3 years.

[@mickjames666]

No thanks. That's a mortgage payment on a nice house. New York is a joke.

[@sfiggz2038]

I hope this will become a trend, especially for urban areas. In Metro Manila Philippines, the rent is really expensive compared to other ASEAN countries. There are a lot of vacant offices, and hybrid/full work from home setup is becoming a trend now. This will definitely help reduce the market-value of properties and rents.

[@swordofallah1129]

If anything it will be the same price as whatever the other apts are charging for rent. There not gonna spend money building out new apts then charge less than the other guy .

[@Chicago48]

The average worker cannot afford $3500. These bldgs have to be made affordable for the working man/woman.

[@rolandthethompsongunner64]

@@Chicago48Then you tear them down and build affordable housing. You don’t convert commercial buildings into affordable housing not even possible.

[@jekalambert9412]

I really would like to see innovative eco design incorporated into these conversions. Why not use composting toilets, recycled/catchment water, free energy, etc., instead of expensive retrofits that continue the environmentally unsustainable practices that have gotten us into the mess we're currently in?

[@rolandthethompsongunner64]

@@jekalambert9412 Have you ever been in one of those homes ? Composting toilets stink. And a self sustaining home is a pipe dream unless you live in the perfect climate like Hawaii. I suggest you do some research. Sure it’s possible but if you have an actual family good freaking luck.

[@Jacob-seek-Jesus-123]

Well it’s clear now that commercial real estate is the next bubble that will burst. We’ve seen this same thing happen with the failures of malls across America when online shopping destroyed that market. Along with urban burn where alot of urban cities are becoming more & more vacant. Work from home or remote access is very cost effective for companies & for the labor force & this too will destroy the remaining commercial real estate. The race is on my friends to quickly turn office space into residential asap & neighborhood style activities in such buildings such as gyms, spas, coffee shops & so on, heed the warning. Prayers for all. 🙏😊

[@ahwhite1398]

That's the subtext in these discussions. The company involved in this interview looked at their leases coming due for renewal and didn't invest all this money out of altruism. How many building owners lack the foresight or lack the means to plan ahead? How many companies, when it's time to renew a lease, will opt for less square footage than last time?

[@here_we_go_again2571]

Low income housing doesn't have those amenities nearby because the people can not afford to avail themselves of those things. Also, low income housing is usually crime ridden. Those retail spaces on the lower floors will get robbed until they go out of business. If people are working from home; they do not want to live in cities and cope with the negative aspects.

[@lovocorozo]

$3500 is consider affordable? Really ?

[@BillySBC]

Exactly, it's just another way of ripping people off, which is all NYC is known for.

[@jacobmartin8896]

It's not the videos fault that you are unable to comprehend the words that you hear

[@paxundpeace9970]

It is New York Median Rent in lower Manhattan is 5500 Dollar a month

[@mickjames666]

New York is crap

[@Jesse-wd9cu]

​@@mickjames666 New york is great. Born and raised in NY and I live in London now and I always wish I could go back

[@BillySBC]

Because no matter what New York City does it will be extravagantly expensive so it doesn't address the problem the city has for affordable middle-class housing. Real estate people in NYC can't conceive of not ripping people off, so it might work but it won't work.

[@jimbo1637]

Developers aren't ripping people off. There's just no way to do affordable housing through the free market when you've got 1.3 million people trying to live on a 23 square mile island.

[@ahwhite1398]

New premium housing puts price pressures on buildings offering "less." Ultimately any increase in supply helps keep prices down. Supply and demand. It's not just a good idea, it's the law.

[@mjg239]

When I used to live in NYC back in 2011 there used to be something called the NYC affording housing lottery. It still exists. If you make a certain income, be it $40k a year, $60k a year, with kids or no kids, single, married, etc. Everyone has a shot in the housing lottery, BUT it's a lottery so IF your application got selected then you went thru a series of interviews to get an apartment, sometimes in a newly build high rise or development. It was part of the 80/20 program where 20 percent of developments had to be regelated to people of various income strata regardless of if they were wealthy or not. And if you get selected you get rent that is adjusted to your income. So sometimes you only pay $1000 a month for a 2 bedroom 1 bathroom apartment in a new building or $1500, etc. Sometimes even $875. But once again these were prices back in 2011. And it was rent-controlled or only incrementally increased over 10 or more years, it was very reasonable. And it's a highly competitive lottery but I knew of people who got in housing this way -- and they definitely went rich and had "regular" jobs. This program still exists. I wish it was expanded for even more people given how hard it is to find affordable housing. It would be great if something like this existed in L.A., SF, Chicago and other big American cities with lots of office space.

[@annoyedok321]

@@jimbo1637 Many of those existing apartments are empty. It has nothing to do with housing, but using real estate as a bank or investment.

[@jimbo1637]

@@annoyedok321 NYC has a vacancy rate of 3.1%, the lowest of any major city in America.

[@rabymaidahsavage258]

I love more apartment units available

[@nickberkawitz6451]

For only $7,500 a month from 550 units!

[@tvviewer4500]

It's not what you think

[@virginia3222]

People will always want to live in New York City, many times only for a few years. Converting office buildings to apartments is a great idea, and should eventually start to eliminate the city’s longstanding housing shortage.

[@andyrobinson7340]

@60minutes You mentioned that in order to attract tenants to these converted buildings, the developers had to also build amenities (like rooftop fire pits, lounges, gyms, etc). Those amenities certainly drive up the cost per unit. I'd like to know where the desire for amenities really comes from. I've seen those amenities in buildings in my neighborhood/area (Greater Boston) and they are usually empty. One realtor of a luxury building said the amenities available (gym, lounge, heated pool, game room) contributed to about 30% of the rent. Where is the data saying tenants want those things so badly, they are willing to pay so much more for them? And if there weren't amenities, would the math work better for the developers for conversion?

[@longhaulblue]

It's probably the other way around. The developers get to charge more because of the amenities but putting them in probably is a minimal cost to them.

[@functionalvanconversion4284]

💯

[@PurpleMonkeyDishwasher88]

As someone who works in the construction industry in NYC, and deals with getting these things built and priced out, the cost of building the amenity areas isn't as high as you would think for the developer side. By having these things in your project are able to charge a premium for your units, regardless if they use it or not. Just how people pay for subscription services they rarely use. It is the same exact thing. A very simple example, say you build a 100-unit building (10-units per residential level). You rent the units for $1k a month, you bring in a total of $100k in rent a month. Now lets say you want to make an entire level into amenities (and not change the footprint of the building), and then charge the rest of the apartments (90-units) a 20% mark-up because of the improved of the "quality" of building. At $1.2k a month with less units you bring in a total of $108k in rent. That's an 8% difference. Then you start to think about separating rentals and condos, and then you add in penthouses. Now you start figuring out, just how they squeeze the profit out of these things.

[@jekalambert9412]

Instead of, or maybe in addition to spas, gyms, fire pits, etc., practical things like a variety of specialty grocery stores, community gardens, lounge spaces, art galleries featuring local artists, a community center with a variety of enrichment classes and a library would make the properties more desirable and would make more sense because these are the things that create a sense of community. I believe we're looking for ways to connect now that there's been a transition to a digital world. Stop focusing on work and start focusing on quality of life. We want to meet each other in person, not in the digital space.

[@PurpleMonkeyDishwasher88]

@@jekalambert9412 btw, in NYC a lot of unleased ground-floor real-estate in developments, are actually used as "public art galleries" and the developers instead of lowering the rent to have a tenant, just writes off the space in their taxes as a loss, while also including the public gallery as a "charitable good" to the community.

[@timallison8560]

it could be affordable housing if the federal government used 5% of the defense budget to provide grants to the city to purchase the buildings that are possible to convert.

[@pepperonish]

That is true that the only way to do it is with heavy subsidies to developers... otherwise they'd lose money and not even bother.

[@internetpointsbank]

Yeah government subsidize more private business...

[@215Daniel]

@@internetpointsbank Yes, that's what countries with significantly higher quality of life metrics (the USA isn't even in the top 20) do, government improves the lives of its tax base, instead of spending everything on "defense."

[@internetpointsbank]

@@215Daniel Then move there and use their version of youtube

[@alphaperez]

It's cool to think how midtown could some day become a modern-day soho. soho used to be industrial, and people said those old building floorplates were too big and awkward for residences, with similar lack of light in the middle of the apartments. but people love living in lofts. I wonder if living in a converted office tower would be nice. Ideally we'd want to build density but the light problems are exacerbated by adding more apartments.

[@can72287]

I feel like the biggest obstacle is the flooor themselves. In offices they are more likely to use light material like metal floor plates since sound is not much of an issue and with apartment towers they use concrete.so they have to create a whole sound proof scheme for this to work

[@brandongant618]

They can pour concrete over the metal floor plates of 1 inch thicknesss.

[@TT-zc6px]

We don’t want more community spaces in buildings. It’s wasted square footage. That square footage that isn’t rentable is then passed off to the tenant. So. Much. Unused. Community. Spaces. A small area and rooftop is all we need. There’s no one ever in those units. I’ve lived in three major cities, we don’t use them. WFH means comfort in my house in pajamas.

[@can72287]

A gym with a pool. Private rooms for parties (so they don’t have to be in the apartment proper). A bar or lounge for adults that’s open to outsiders. A spa. Maybe a daycare. Maybe a space for young kids to play (under 12) so families will not be tempted to move out to the burbs for “free space”. Plenty of things to do with space that’s not useless.

[@sleepy670]

Its sad there are no developers out there building tiny basic studios that can be rented for around $1500/mo. They can be 200 SF with no parking. 6 story walk up. Zero amenities. Main thing is it's affordable and new. $3500 is insane for a studio.

[@Sashowindfeather]

It's 3500 because its in the financial district of NYC. If it was elsewhere, it would be .

[@spaceman081447]

@sleepy670 Are you saying that a 200 sq ft apartment for $1,500 is "affordable housing"? That seems high even for NYC. But then I am from the Midwest so what do I know?

[@sleepy670]

@@spaceman081447 yes $1500 is very affordable for your own place in NY. It could be tiny but if I had a little kitchen and washer dryer in unit and it was new construction, $1500 would be fantastic. The thing is it doesn't exist. Unless someone can find something. I sure can't

[@MessyPointedBlob]

Yea but why build $1500/mo studies with a 40% profit margin when they could build $3500/mo studios with 80% profit margins?

[@spaceman081447]

@@sleepy670 OK, I understand that $1,500 is "normal" for NYC, but 200 sq ft seems kind of small. That's a square a little over 14 ft on a side or a 10 ft x 20 ft rectangle. For comparison, my apartment is in a building that is subsidized senior citizens housing. It is a 1-bedroom unit that is about 500 sq ft. The rent is $300 a month. (Yes, I know that the market conditions are vastly different.)

[@andyroo9381]

I am not from NYC. I choked when he said a studio would rent for $3500 per month!

[@CoolAce1-dv1pn]

Yeah that's a ripoff. 1,000 per month is even pushing it.

[@pkal244]

Our 2br in Hell's Kitchen was $6k in 2015 😅 We've downsized since then but are paying $4k for a 1br in a different neighborhood.

[@mistermood4164]

The median rent is 5.5k

[@GCJACK83]

These buildings are large enough where they can be entire neighborhoods on their own. I say, the first few floors, have shopping and services. Groceries, doctors' offices, post offices, restaurants, stuff like that. Over those, have residential units. Maybe even throw in a few laundrymats and a gym.

[@AneudiD78]

180 Water Street, right next to 160 Water Street was converted from commercial to residential in 2017. There was another proposal for 175 Water Street (formally AIG), across from 160 Water, to be converted from commercial to residential, but those plans have stalled. Way down the block at 25 Water Street, formally known as 4 New York Plaza, is currently converting old office space to a 1300 residential building. Edit Update: 175 Water Street is no longer able to convert to residential due to a state law that only allows conversions to happen only to office buildings built before 1977. 175 Water was built in 1983.

[@time2fly2124]

"$3500 for studio to $7500 for 2 beds" aFoRdAbLe HoUsInG!

[@houseofhas9355]

😂😂😂

[@bobmcbobbington9220]

Nobody said anything about affordable housing. They explain this in the video.

[@niyablake]

Did you miss the part were they said affordable housing would not work out ?

[@snypa-ck7hn]

great video, both of them spoke in a way we can all understand

[@shatterstar913]

I really like the interviewer, just a good interviewer and speaker. That's all

[@215Daniel]

Singapore has subsidized housing, they have an 87% home ownership rate with 99 year leases - none of which have come to term since the ruling party that began the subsidized housing initiative in the 60's took power. It's wildly, popular as they've remained in power. $250,000-$400,000 initial purchase price in new buildings with an average resale value of $1.7 million USD. The buildings all have amenities, schools, daycares, supermarkets, drug stores, restaurants, cafe's, bars, easily accessible to their highly efficient public transit systems. Older people have priority on smaller units versus young families who have priority on larger units to grow their family. Limitations on number of units you can purchase, and corporations are not permitted to buy them. This is the model we should be replicating. High-rise, subsidized housing in every US city.

[@alanc7772]

And Singapore has QUALITY buildings and units that last, using good materials. Combine the Singapore model with the comment below about motel-like basic units and it's definitely possible.

[@edsteadham4085]

People in Singapore have no other options. People in the us can and do move to roomy suburbs.

[@Tes7000]

Singapore is a very different kind of country culturally than the United States. Socialism in the housing sector in the United States has generally produced poor results. You would have to impose the same level of government and societal control over individual citizens if you expect a broad-based subsidized housing program to work in the United States. Projects have been a failure in the United States for decades. Otherwise, I don't like the concept of government telling me where I can live or what kind of housing I can obtain.

[@215Daniel]

@@edsteadham4085 Yes they do, they aren't required to live in subsidized housing.

[@215Daniel]

@@Tes7000 The purpose of subsidized housing is to house low income and working class people who otherwise can't afford a detached single family home. There could be income restrictions, it wouldn't be and in the case of Singapore isn't a requirement to live in a subsidized apartment.

[@SydneyCarton-sf3mq]

The construction of so many new supertowers in New York is a testament to the vast concentration of wealth there. 175 Park and 350 Park, like 270 Park and 1 Vanderbilt, will be amazing.

[@reginaerekson9139]

Why don’t we rethink indoor living. With dark interior space, it could be used for common areas. Make the apartments basic like a motel room with light. It could be family buildings with interior play space, place to have social events - birthdays, holidays etc. or workspace.. whatever demographic…. It’s a new radical way for people to build community if it’s a singles building. Lifestyle living space! Sliding scale rent.

[@SerendipityNJ]

Like a commune of sorts

[@paxundpeace9970]

A play space could work well right to an indoor light well. Could be something if you get the right occupants with family and kids. A gym could and workout rooms could work as well to some degree. Good suggestion

[@alanc7772]

I agree! And focus on quality finishes, tile bathrooms, durable materials, fewer edges and nooks and crannies to make cleaning easier.

[@serafinacosta7118]

You need daylight into private units I; order to make it work. As for common areas , shared office , Gymnasium , yiu need daylight. The only places you can forgo daylight are garage parking , storage , and that is about it. Large office plated with core shaft does not work, and that is the bread and butter for corporate suites. Hence the 10-15% convertible rate.

[@michaeladdison2609]

You need windows for any pleasant living space but you can have a large deep room with windows on only one side and have it still be nice even if the window side is 50 feet away from the front. For example some libraries feature large deep interior spaces but also have high ceilings and it's not unpleasant to sit at tables in the central areas. The problem with carving up office space mainly follows from trying to divide as much of them as possible up into exclusively owned residential bits. It's only given that demand that in many cases the task becomes impossible. Which isn't to say it'd be economical to redevelop an office building if you couldn't get very many residential units out of it. Just that one could if only the financials would justify setting aside that much interior space as something other than exclusive apartment space. @@serafinacosta7118

[@nothingtodo225]

Some math to put this into perspective: $273mill/588units=$464,285 per unit. assuming they get a 30 year loan (they won't), with 20% down at 7.5% interest (loans like this are way more complicated so its difficult to predict the exact terms) you get a monthly payment of $2,623 before property taxes, insurance, and maintenance or any construction issues. It's no wonder these places are not affordable for most Americans.

[@Davett53]

It was great to be alive during the late 1960s and early 1970s, & 80s, when office buildings were being abandoned as everyone was fleeing to the suburbs. Suburban Office Parks were all the rage. As downtown office buildings were sitting empty for long periods of time they were neglected and slowly decaying. This created a niche market,....for artist's to take advantage of. Artists could rent older offices for well below market pricing, and convert them into both Art studios spaces with a small living quarter tucked away, out of sight. Smaller offices like ones that had been occupied by Dentists, and small accounting businesses, or Law firms, were prefect. Property owners were desperate to have at least some income coming in, didn't ask too many questions. We had artist friends who rented a huge office that was at least 100 feet long, divided up into many sized rooms. Plenty of art making spaces, gallery spaces, and well disguised living quarters. These creative individuals sometimes utilized "James Bond-ian" gadgetry, so that bedrooms magically folded out of sight, into and under mechanized walls and floors.

[@josephalmond3759]

Good reporting. Brilliant scholar.

[@peace-or2cp]

Interviewing low and affordable-income housing groups creating housing would have been helpful. In some ways, this feels like an ad for high-income housing. Not sure what these conversions add. That said, not tearing down perfectly good buildings is a huge plus.

[@paxundpeace9970]

It is not an add it is economics. High Building cost Costly renovations and remodeling results in high rents.

[@EricaGamet]

I think they were pointing out that, though conversions are possible, it's not going to address the low- to middle-income housing issues we are facing. People keep screaming, "Convert empty office buildings and BOOM we've solved the housing crisis!" This pointed out why it won't work. It might make a small dent in having more high-end apartments which might make a small amount more of lower-end units available.

[@peace-or2cp]

@@paxundpeace9970 Yes according to those who are building it and the type of expert they tend to hire. My point is that many low and affordable housing groups build housing differently and their views are not included in this piece. Those views would have helped the piece present a more accurate picture.

[@spaceman081447]

​@@peace-or2cp Well, Habitat for Humanity doesn't convert office buildings to affordable housing.

[@bobmcbobbington9220]

Just because it doesn't pertain to you, doesn't mean it's not news.

[@mikegammon1]

i always wondered why they didnt convert empty malls into like an indoor living communities and get like the food court set up to be little eatery's or like their own little grocery stores

[@Isynchromissity]

They will eventually

[@lorib5398]

or convert malls into roller rinks....hmm?

[@derekd1510]

Homeless people don't need luxury apartments. They need a cubicle to sleep in, hygiene facilities, health care facilities for both medical and psychological treatment, academic and vocational training facilities, and a cafeteria.

[@paulcastillo1310]

Just need to do this in Los Angeles California

[@BillySBC]

The need to build skyscraper apartments nobody can afford? Don't they already have some version of this?

[@squibbelsmcjohnson]

And what.. Pay $3000 a month?

[@paulcastillo1310]

@@BillySBC yes that's is true

[@AmberWest-dm5xh]

😅 it's about time this could drop some of the rent prices

[@fhamilton6788]

Doesn't matter if they still aren't affordable 😅

[@caboh]

Not true. Enough units of any type lowers all rents.

[@kimberlyahil]

Randy Alexander did this 30 years ago. Great idea 💡 ❤

[@johnnyonthespot4375]

At $4000 per month (low average rent) this place is set up to be paid off completely in 5 years. But No one there thinks it makes sense to stand up against $4000 a MONTH for a tiny STUDIO apartment or $7000 for a whopping 2 bedroom ?!!? (Did you notice how the guy became kind of insulted when the interviewer gasped at the price ?) FU!&#$@%CK New York -

[@mrparts]

I’ve seen one of these old obsolete office buildings converted to apartments . It I was fine for singles or couples with no children. The only con was the windows were tiny.

[@BoxersRealty]

SROs maybe easier and cheaper to design and construct. While making large common spaces within the interior of the property. I am sure there would be a large demand for such apartment spaces but the rental math may not add up.

[@alanc7772]

I am with you on this, like the comment about motel-style units above.

[@antoniojohnson3925]

I currently live in the Omni Recidences, which is exactly this setup. Is it expensive yes close to about $50,000 a year in rent. But the amenities housekeeping on site dry cleaning, and three restaurants on the lower level, private fitness center and pool and a hot tub and bowling alley to make it worth it. Additionally the is a grocery store and spa.

[@earthmama5659]

I think this is an outstanding idea!

[@NocturnalMissSo]

If only they would do that with empty buildings all over the country. The homeless crisis is growing. $7500 for two bedrooms a month? Thats insane. Who can afford that besides the rich?

[@piolin23iq]

San Diego needs low-income housing.. the payments for the rent-to-income ratio don’t add up. (Minimum wage obviously)

[@BillySBC]

If you need low-income housing in America, try Ecuador.

[@piolin23iq]

@@BillySBC cost of living and quality of life is far superior in South America like Mexico and other non-communist countries people live happier lives. And is all documented.

[@paxundpeace9970]

Raising minimum wage would help. It should be at least 15 bucks if not more

[@kharithoughts2679]

To allow more office-to-residential conversions. Why don't they do a partial conversion? If a property is too deep to give the interior light, why don't they convert the outer areas towards the windows to residential and then make the inner areas commercial? All commercial offices don't need windows, especially if the offices are more affordable. Then, more buildings will qualify for conversion, and it might even be cheaper than hollowing out the inside of a skyscraper or doing other drastic measures.

[@gigif8566]

We need housing, but affordable housing is in desperate need. All they are building are huge houses, pricey apartments & warehouses. There is a warehouse 5min from my sister's home that was finished a year ago & it's still empty. There is a empty mega warehouse 8min in the other direction. If both had been housing they would be at full occupancy.

[@fluxfaze]

In 2006 I started my own LLC and began working at home full time. Operated the company in that home studio twelve years, through the great bankster-automaker bailout-induced recession, and beyond into retirement. It was the most positive change of my entire life.

[@nultari1]

What type of business

[@GregSmith-jd7zm]

$7500/month for a 2-bedroom in NYC financial district. I predict that many of these 2-bedroom apartments will remain empty until they drop rental rates.

[@WhyUmadWhy]

They'll convert it to housing & then pull a California 2800 for a one bedroom just outside the hood😂😂😂

[@fu2201]

interest rates are NOT at historic highs. Look at the 1980s

[@bernardocabebe8685]

Walls, fixtures, and finishes of a residential unit are heavier than office. Conversion has to be assesed and certified by a structural engineer before implementation to make sure the building foundation and columns are safe.

[@kennielsen3896]

If they're saying they can profit on a 2-bed apartment for $7,500 a month rent in Manhattan, it sounds like a bargain. Newer construction on my street in West Hollywood rents for $10,000 a month! I could rent my 2-bed apartment for at least $5,000 a month. I have a friend who had multiple homes (he had offices in several states and in Europe), one in upper west side of Manhattan, Trump place, that rent was $10,000 a month almost 20 years ago.

[@missulu]

So basically no one can afford them!?! I like the premise, but cost is prohibitive...

[@kevinsheppard7517]

Correction: interest rates are not at 'historic highs', nor are they anywhere close to that

[@qurhanhall4844]

$7,500 for a 2 bed is crazy

[@amuletk]

That many lights for a simple interview

[@LouThunderBomb]

What I don't understand is, if there are fewer and fewer people working in offices than how are the Manhattan rental prices still so high? If people aren't working in Manhattan then the major reason for living in the city is gone. If you don't have high salary people living in these apartments who the heck is? If people can live in a cheaper area and work from home what incentive do they have to live in a pricey city? Reason dictates that fewer people working in the city should mean fewer people living in the city which would decrease demand a long with the price. Something doesn't add up.

[@whendoigettosayfuck]

Apartments and greenhouses to produce free food 24/7. We can feed and house everyone easily with little effort. One floor is housing.”, one floor is farming where people who get free housing work a few hours per week. Easy peasy if you weren’t so dumb

[@bernardtarver]

280M loan for 588 units with a median rent of 5.5K/month brings in 3.2M/month in rental income. The principal could be paid off in less than seven years.

[@danielmankinde1706]

Tell me you know nothing about real estate . 280 million loan . Did you account for the existing value of the underlying real estate that has being paid for ? That’s east 100-200 million. Let’s even go by your foolish calculation assuming 5.5K rent . Not all units will be occupied . Industry standard is 95% occupancy 3.1 monthly gross rental income Management and expenses to run the building, including property taxes is usually 40% of that 3.2 million . Left with about 1.9 million per month. This is called the net operating income at full occupancy .Taking the very bold assumption z Go to a mortgage calculator and do the math. 280 million dollars ( which is a. Construction loan) will probably pay 16 million dollars in interest for 1.5-2 years construction phase while the property earns 0 income . 280 million+ 32 million 312 million. They’d have to refinance into a long term loan of 312 million to convert the construction loan into a permanent loan 312 million at 6.5 % interest which is a good interest rate in todays market. Has a monthly payment of 1.97 million. So even after rebuilding The max next operating income is 1.9 million it doenst even cover 1.97 million required to pay the loan Most lenders require 1.25X A min of 1.25 X 1.9 million a mo. 2.375 million Net income monthly. Befor they even extend the 312 million to replace the construction Loan. So it will take years barely pay for itself . And even more years to start making any sort of income And atleast 30 years to be paid off . The question why will any owner take that risk with high interest construction loan. When they may not be able to convert the loan into a low interest permanent loan in this economy. They’re mostly feasible if there’s some form of tax abatement . Where the property tax is reduced to make the project profitable . Not to mention sometimes the land isn’t even owned by the owner of the building it sits on The land may be a 30 year lease. And would still have payments regardless of it’s occupancy status.

[@bernardtarver]

@@danielmankinde1706 I didn't say anything about taxes, interest, payroll, overhead, etc. I'm unsure if you are responding to my comment or your inner thoughts. The one thing I didn't consider is rent increases, which could be in the neighborhood of 2-5% per year. Regardless, I obviously expressed that they would make back 280M in revenue in several years; plus, those expenses could already be priced into the rent.

[@danielmankinde1706]

@@bernardtarver don’t try to support. your BS analysis .. I’m a Real estate analyst. … revenue has nothing to with them getting their money back. All that matters is NET income . most times rent increases on proforma don’t actually kick in until 3 -5 years . Which is why some loans have 5 year interest only period to real full stability. To meet lenders longterm requirements. In the first year . Most developers offer 2-3 months free for. 12-15 mo lease . Effective rent for that period is usually 20-25% less than the proforma rent . . Hence the net income will be much much lower as the total expenses vary little regardless of its occupancy rate. Developers hope that when it’s time to renew rent they willl be able to get tenant to renew at “market rate” 5.5k as you proposed . Reality is even on next cycle of tenants they still have to offer atlesst 1 mo concession and turn over period are usually slow with 2-3 month of vacancy on any given unit See Hudson yards? Nearly empty! And they can’t rent it for less as it will devalue the property on paper . And inhibit the potential of refinancing the debt . An empty apartment can be worth more than a cheap (non concession) lease .. You gerrit?

[@davidhill850]

$273million was just for the loan to convert the units. Was the building free? How much other money did they have to kick in, as I doubt they gave them a loan for the whole thing.

[@ECHSBACHS]

2:21 OUCH !

[@ryanhorsley9965]

Why would we expect a building which is practically new construction to be renting units at "affordable" prices? Just like with cars, the affordable units will be used and depreciated ones. By building newer and better units, older apartments then become less desirable and see downward pressure on prices.

[@BrandonClark-StocksPassports]

It will have higher ceilings and more spacious But do not think for ONE SECOND it will be cheaper.

[@MrGriff305]

This is the best solution to fix two huge problems... No demand for offices and absurdly high housing costs

[@polyglot6542]

And you are missing the point. They are converting NOT to offer affordable housing, but to charge high prices doe those who think they want to stay home to work because it is cheaper.. what a joke!

[@MrGriff305]

@@polyglot6542 All new housing available will only lower costs for buyers.

[@Krobra91]

older buildings were easier to convert but newer ones not so much.

[@ianpatrick23]

It’s good to see at least some of these buildings converted to residential

[@Jack-ne8vm]

Ridiculous rents. I'd think that empty interior column could be a dangerous fire chimney.

[@shirleylavernerosej.120]

When u run electrical from exterior it’s not. Use exterior instead of price gouging renovations it could be done. Home offices. Mixture of apartments & offices where employees living within their work. They have intelligence they’ll stay away at air bnb it hotel\motel when party or bring unsafe folks to the building where they earn a living. 3 days in office 4 days at work on another floor.

[@JeffHenry-cq3is]

Could do the same to hotels City doesn’t want affordable housing

[@netposerx]

Yeah, 2 minutes in before they say these are not affordable. I can see tons of issues with the conversions.

[@spitzmann007]

Fortunately I don't come back to an office. It was a long time of my life wasted commuting.Time and money spent keeping the real state market happy. If the real state bubble and lobbies never existed I would be ok working in an office.

[@sugarcookiecube]

If a person resides in a converted apartment/condo AND remotely work from home at least 70%of their workday they should get a tax break…that will create incentives for people to pay higher rents for the perks.

[@seanbullough6296]

Won't matter at all if they price the units at the current market rates (which we know are being manipulated). Those current rates are the main problem, apartments are just too expensive.

[@christopherboagard2206]

Studio starting at $3500 That's insane. #AfordableHousing

[@johnd.5601]

I did plenty of businesses into apartments back in 1997 to 2000.

[@therealbronxbull8541]

So, you bragging or complaining?

[@johnd.5601]

@therealbronxbull8541 I dated it for context. It was a time of transition. Office buildings were changing rapidly. The old buildings didn't have the structure or layouts necessary for the server rooms. It's not a new concept. I definitely liked being part of these projects.

[@internetpointsbank]

@@johnd.5601 So you are saying older buildings couldnt eliminate one office for the server room?

[@johnd.5601]

@internetpointsbank I think it was floor to ceiling height. The cost of renovations and location. It could also have been the use per square foot or cubic foot. There was issues with the heat from the equipment that required extensive HVAC. I remember a few jobs that was a big issue because the plumbing was difficult and extremely costly. It was different from building to building. Back then, they were using static conductive flooring in sever rooms. Later on, that changed.

[@Anthony-dj4nd]

Expensive. Who's going to pay that $4k a month rent?😢

[@shawnsanders1282]

$42,000/year for a Studio apt. to $90,000/year for a Two Bedroom apt. to RENT in Manhattan. 🤯

[@kingjames8283]

Wow that's scary, $7,500 a month just for rent which is what I make driving a semi-truck in two months. If I had that kind of money just laying around, it would pay my rent for 6-months. I'm trying to figure out the math on this, I bust my rearend and put my life in danger every day to put food on your tables, clothes on your backs, and build your infrastructure while you sit home everyday doing nothing and getting phat rich while guys like myself who do ALL the work and live paycheck to paycheck, living in a trailer home, driving 10-20 year old vehicles, and eating Ramen noodles because this is how our society works. Those who do little to nothing get all the wealth and comforts of living while those of us who do the back breaking and dangerous work get paid very little and struggle to survive. I'm lucky to see $40,000 a year driving a semi-truck when my time and effort are worth $200,000 a year or more. This is so wrong on every level. Thirty-eight years driving a truck and nothing to show except a trailer home and an old pickup truck because by the time I pay my cost of living dues, there is nothing left. Rent, utilities, food, insurance, and transportation takes it all.

[@ernestnelson2407]

isn't $3,500 basic rent in N.Y. High end would be 7,500 and above

[@MemphisKP901]

What do you expect in NewYork?!? $850 a month?

[@seancasey2444]

This is exactly what I said to do on the other show there is definitely a shortage of places to live in New York City.

[@bwuh]

Coming soon to downtown SF.

[@gonefishing11]

$7,500 per month for a two bedroom apartment!?!?

[@AGRC314]

Once people move into those former office spaces and decide they’re going to work from home we’ll be full circle.

[@nadjadavidson411]

264k sqf office building in OH just sold for 2.4 million. That’s $9/sqf and about $291/sqf less that what residents real estate costs in Tampa Bay. I think it’s time to seriously consider moving. 😂

[@CHixon]

Small-town USA emptied out decades ago. Now it's New York's turn.

[@kasbas5922]

Working from home will never work in the long run, watch when these office buildings will get extremely expensive in the future !

[@thmphll]

Remote work from downtown? To each their own I guess, most people I know would take that high paying remote work job and live in a rural location.

[@user-pd4yj2ge5c]

Nice

[@ShawnLH88]

About time.

[@GMVideography]

The man admitted NONE of these are "affordable housing" rentals. The developer verified that, as well as a studio-2bed max. NO 3 beds or 4 beds which is not family friendly..... WHO THINK STHERE ISNT ENOUGH PEOPLE WHO CAN AFFORD THIS??? NYC is setting itself up for even more homelessness and bs at the hands of developers and the Myors office. yuck

[@JoseLopez-xv4fc]

if you put affordable housing in downtown, not arguing for or against, but will that be enough to maintain high-rent downtown businesses?

[@POSTONBEATS]

$3500 for a one bedroom AND $7500 for a 2 bedroom is NOT AFFORDABLE housing America is full of greed

[@MosesKim-je5rj]

"Interest rates are at historic highs"..? Only if your view of history is 15 years.

[@magictrading8903]

So affordable housing means subsidized housing

[@maxpower2511]

Mr. Stenbergstein: Oy Vey Mister Shekelbergstein! How are we going to make our shekels? Mr. Shekelbergstein: Let's convert office buildings into apartments! Then the government will pay us MORE shekels and they never default! Mr. Shekelbergstein::Hey, call up Mr. government guy and tell him we will give him shekels for re-zoning us! Mr. Stenbergstein: Yes, fellow tiny hat member!

[@ej-og6ni]

15 minute cities 🔥