Lessard is a key player in the specialty design niche of office space to residential conversions in the Washington, D.C., Maryland, and Virginia, market and beyond. Today the firm shares with us their valuable insight into that process.
THE MARKET
Real estate development is always about the market. What happens when a once-prized office building suffers from 20 percent vacancy, becoming a liability rather than an asset? You turn it into an opportunity through creative design and careful planning.
Office-to-multifamily residential (MFR) conversions have become a defining trend across the nation. The Washington, D.C., region ranks second in the country for these conversions, after New York City, with approximately 6,300 units in the pipeline for 2025.
Washington, D.C., has reached this milestone with innovations such as expedited permitting and its Office-to-Residential Tax Abatement Program which provides a 20-year tax break to developments that meet specific criteria. As office demand continues post-pandemic decline, these policies have made adaptive reuse a strategically advantageous alternative.
OPPORTUNITIES
Downtown neighborhoods are being reimagined as mixed-use intensive and vibrant communities. Adding residents by way of a diversified housing stock (apartments, condos, affordable units) brings new life to central business districts, enhancing safety by filling in empty streets, supporting local businesses, and reinforcing demand for public amenities.
Many office buildings are located near Metro stations, making them ideal for transit-oriented developments that are less reliant on cars, thus reducing traffic congestion.
Furthermore, adaptive reuse of buildings is more resource-efficient than demolition and new construction, significantly reducing the carbon footprint.
CHALLENGES
Not all office buildings are suitable for conversion to residential and these projects are rarely straightforward. A host of complex technical and practical issues must be dealt with in adapting one building type to the other. Some of these obstacles include:
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Office buildings often have deep floor plates, making it difficult to layout residential units. Plumbing and mechanical systems must often be substantially reworked and even collection of refuse is different in residential (chute) vs. office (daily collection).
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Zoning changes are often necessary.
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Securing community "buy-in" and navigating historic preservation requirements can add to the challenge.
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Costs can be significant and not all conversions pencil-out, especially in areas where office values have not declined enough to justify the change.
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Lastly, while policy incentives often target affordable units, balancing costs with affordability requirements remains difficult.
UNIQUE ADVANTAGES
Office-to-residential conversions offer unique advantages over traditional ground-up MFR construction, for example:
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Office buildings typically have 30 percent to 40 percent more glass, enhancing natural light to interior spaces.
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Office buildings are often built to a higher standard of construction.
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Access to roads and public utilities is generally good.
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Structural live-loads (i.e., the weight of people, furniture, and equipment) and allowances for concentrated loads normally exceed those in residential construction.
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Time to market for design, permitting, and execution can be significantly shorter than ground-up construction.
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Office requires more parking spaces than residential uses, thus surplus parking area is available for other uses such as ground-level commercial space in mixed use redevelopments.
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Floor-to-floor heights are higher than those in residential buildings providing higher ceilings, a very attractive feature in marketing residential units.
THE NUMBERS
In 2024 the average construction cost for office-to-multifamily conversion in the Washington, D.C., region is approximately $200/SF versus about $275/SF for ground-up multifamily construction.
This means that any office acquisition deal at or below $60 per SF is worth analyzing.
DESIGN LESSONS LEARNED
Conversion of existing offices to residential units requires highly specialized design knowledge and a thorough understanding that the latter spaces need to adapt to the former and not the other way around.
Complications arise when this basic precept is not followed. Some of the more common pitfalls that complicate design and/or increase costs include:
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Attempting to relocate or remove stairs and elevators—these are already built and usually oversized, so it is best to leave them in place.
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Attempting to re-format or replace glazing beyond the waterproofing seals. Keep window retrofits to the minimum.
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Not considering that a full mechanical (HVAC), electrical, and plumbing retrofit is normally needed.
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Loading for multifamily is far more intense than in office buildings given the frequency of move-ins and outs, requiring careful planning, in particular at the lower floor level(s).
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Keep the restroom core to save on demolition; it is in the center—the least desirable location—so it does not pay to remove it.
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If evaluating a post-tensioned concrete structure, note that the required floor penetrations can be substantially more complicated.
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Avoid adding or creating new balconies.
Also, office building plates are usually 40–45 feet from window to core and there is a misconception that residential units deeper than 35 feet are not marketable—again, this can be overcome by design ingenuity in adapting the apartment layout to the existing office plan. Attempting to carve out portions of the existing floors to create vertical light wells can lead to substantially higher costs.
Notable Washington, D.C., Maryland, and Virginia Conversions by Lessard
Here is a curated list of a few of Lessard's signature projects in the Washington, D.C., area:
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Three Collective, is a unique project built in Falls Church, Virginia, that features 675 live/work apartments and homes for residents in accordance to the Fairfax County Workforce Dwelling Units program.
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5001 Eisenhower Ave is a conversion of and existing office building in Alexandria, Virginia, into 377 rent-controlled housing units, including affordable and workforce housing. It is currently in the permit phase.
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Venue is an upscale condo conversion of the former Crowne Plaza Hotel located in Alexandria, Virginia. The development features 122 condos in a 13-story tower and 41 adjacent townhomes.
Conclusion
The story of office-to-multifamily conversions in the Washington, D.C., metro area is one of adaptation and ingenuity. By turning yesterday’s empty offices into today’s vibrant homes, the region is not only addressing its housing needs but also paving the way for a more dynamic and sustainable urban future. As the city continues to evolve, the lessons learned here will resonate far beyond the Capitol, offering inspiration for urban revitalization across the nation.
Special thanks to Lessard Team members Ulises Montes De Oca, and Jodi Leigh for their valuable contributions to this article.