Source: SP Global —
Across the U.S., cities and states are planning incentives for converting offices to homes to alleviate a housing shortage and address rising office vacancies, Axios reported.
The state of California is allocating $400 million of its 2023 budget to incentive grants for office conversions to residences. New York, Chicago and Los Angeles are proposing regulatory changes, tax credits and financial incentives to encourage such conversions, according to the report.
Washington, D.C., has a pending proposal for a 20-year tax abatement related to similar projects. Among the big ticket office-to-residential projects in the city are the conversion of Universal North and South buildings at 1875 and 1825 Connecticut Ave. NW, according to Green Street’s Real Estate Alert. Office landlord JBG Smith Properties sold the property to multifamily developer Post Brothers in April for $228 million.
Daily occupancy for leased office space has fallen to less than half of the pre-pandemic level, Axios said, citing Kastle swipe-in data covering 10 metro areas.
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