The transformation of an office building into a vibrant hotel isn’t anything new. Many of these spaces have been reimagined to offer modern amenities while preserving their architectural heritages. Join Brad Wellstead, a senior lecturer at Cornell’s SC Johnson College of Business, for a deeper dive into this phenomenon.
The trend of converting office buildings into hotels has become more popular as companies ditch their office spaces in favor of remote work. Places like New York City, Washington D.C. and Calgary are even offering incentive programs to draw more interest. A perfect example is the former headquarters of the New York Daily News in Manhattan’s Financial District; in the U.S.’s largest conversion, it now houses 1,300 luxury condos.
Brad Wellstead, a senior lecturer at Cornell’s SC Johnson College of Business, helps us understand the process of turning these old buildings into new real estate as well as some of the main pitfalls that developers face.
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This transcript was generated using AI and has not yet been reviewed for accuracy by a human editor.
Chris Wofford: Today on Cornell Keynotes, we are looking at recent trends in conversion of office space. Now, the transformation of an office building into a vibrant hotel isn't anything new, but since companies have been increasingly ditching their office spaces in favor of remote and at home work, there is a lot of creative development and a lot of economic opportunity in this space.
Once again, downtown districts are being reinvigorated and reimagined as cultural and commercial centers. Joining us in conversation are professors Brad Wellstead and Jan DeRoos from the Cornell Nolan School of Hotel Administration. Now Brad and Jan are faculty authors of several online real estate certificate programs from Cornell.
So if you find today's conversation compelling and you want to learn from the best, look no further than the episode notes for links to their courses. And now, here's Jan DeRoos and Brad Wellstead in conversation.
Jan DeRoos: So office remains a toxic real estate asset, despite the best efforts of some pretty big companies and the great Federal government to get their workforces to return. Office vacancy remains elevated at almost 20 percent versus the long term trend, which is a vacancy rate of 10 to 15%.
Reduced office utilization not only negatively impacts owners and businesses, and their returns and their valuations of their buildings. It impacts the cities themselves due to a reduction in street activity. The habits and attitudes of work from home developed during the pandemic appear to have a lot of stickiness.
But on the other hand, we have multifamily vacancies, which remain at historic lows of 5 percent and hotels, which have elevated occupancies or low vacancies uh, at historical highs of 66 percent plus. Plus. So I'm going to turn to you, Brad, and start to ask a set of questions. So what are the obvious and not so obvious benefits of office conversions?
Brad Wellstead: Well, in the cities and when the buildings in those cities that are a good fit, it's it's an opportunity to breathe new life into what's really an underperforming or, you know, not performing asset. Um, the opportunity that that then drives. Is that some of these severely underperforming assets are also in quite distress financially and so on.
And so those who are willing or thinking about doing conversions can find these buildings or assets at a at a pretty significant discount. so that's one of the factors that is driving some of this. Another kind of more soft thing, and this is one that a lot of people agree on, and you made a brief mention of, is that the, you know, most of the prime candidates are in urban districts, and, you know, they're kind of more the 8 to 5 roll up the sidewalk type areas, you know, as office space areas, and so this can bring a wholly new demographic and social and economic dynamic to a neighborhood, really kind of making us this agent of change for that city.
Jan DeRoos: is this a temporary or a permanent phenomenon? It makes some sense in the short term to do conversions, but in the long run, if it makes sense for this to be office space, why go through all the the problems now? So what makes this a permanent phenomenon?
And are there forces at work other than work from home?
Brad Wellstead: Okay, It's a loaded question. It's a big one. Um, you know, we're still, I think, even though this is kind of the stickiness of work from home has happened, it's still in his kind of a significant transitional phase. I mean, it's no longer special.
Um, and it's, you know, settling in as kind of the work, you know, kind of the condition, right? Um, and Then there's the reactive changes that work from home cause to the office culture. So, you know, we're not, you know, because people want to work from home, um, you know, to the extent that, uh, because of the work life balance benefits to the employees, you know, there was a poll that recently came out just a few weeks ago that said, Workers feel that two days of work from home is the equivalent to an 8 percent pay raise.
you know, that's something that, you know, people are kind of into. So I don't think it's going away completely. I don't, you know, I don't think we can unring this bell. You know, even though we've just found out that, you know, the federal government is going to come back, U. S. federal government is going to be on a mandate of coming back to work in the offices, and that's, you know, that's going to have a pretty strong impact on the Washington, D.
C. market, I imagine, so that unringing is also driven by the fact that now employees have a new negotiation point when they're looking for work, and just, you know, This dynamic has to be, you know, considered in the overall mix. some of the cons of this, though, is that, you know, there may be some reduction in productivity, and and actually I was doing a little bit more research on that particular point, and actually productivity in a work from home environment has actually ticked up in certain sectors up about 5%.
So, you know, what can you say? Um, But I think the office culture is what suffers the most. And, you know, from that point of view, if you're just thinking about some of the, big pros and cons, the face to face mentorship is different than what we're doing right now on zoom. And I, I feel that that's something that we have to, that needs to be addressed in that whole thing.
So, companies and leadership need to think about overhauls of their whole overall office and their workplace cultures. And they, I think there's gotta be some kind of embracing of it and making it now part of the office culture, the work from home, and which is going to enhance the overall Worker satisfaction and it's going to have that stickiness and impact on amount of space needed as a result.
Jan DeRoos: we have office conversions that are exploding. the number of square feet under renovation are projected to be under renovation, is now in the approaching 100Million. It's not quite. It's about 60, 70Million at this point. That's a significant amount of the overall U. S. supply. In addition, most of that conversion is office to residential.
So, question for you, Brad, is, you know, as part of your answer before, I'm going to take it that, um, yes, it does appear to be a permanent phenomenon because developers and owners are voting with their feet in terms of new projects. What accounts for this dominance of office to residential?
Brad Wellstead: 56% of the overall number of conversions that are tracked here, which is around 690 or 680, are all happening in the last 13.
And in, you know, months or so and projecting into 25. So it's a. That's a significant thing. But, to go to your question more specifically, you know, what's, what's driving the, the office to residential conversion, is, um, there's a, in many cities, the difference in occupancy between a residential multifamily and for that matter hotel relative to office occupancy is like 15 percent Delta.
Okay. And that's in on top of the fact that that most cities are in the midst of the housing shortages. So there's demand that's being pushed there. There's more people that would be using the facility and then the shrinking office demand of work from home and then, you know, essentially doing nothing.
As an owner here, if you are in a stress situation is not going to end. Well,
Jan DeRoos: you'll get outbid by people who can do the conversions and can you know, can collect the additional rent that comes from a reduced occupancy,
Brad Wellstead: right? We'll talk later a bit, but, you know, most of these buildings that are being converted are older buildings.
They're not the class A, super high quality AAA buildings, more in the BC range, but they tend to be older and they have a lot more character. So actually they, you know, it's, it's kind of a plus to move towards residential and hotel with this, with that kind of situation. So, I mean, if you sat on a A hundred year old building and expect it to be an office building, you know, in this market right now.
It continued. it's something that you need to consider in your mix right now.
Jan DeRoos: And then some of the, hotel and life's life science conversions are the, the other two categories, but they're both, under 15% total, you know? Right. Some of those are in urban cores, but the life science buildings might make sense in a suburban setting.
There might be some industrial in a suburban setting as well that could be converted. So I think those candidates, I mean, there's clear bifurcation in terms of where buildings are located but the urban cores tend to dominate with the conversion to residential. So let's talk about descendants. So there's a variety of incentives for conversions that cities are talking about.
Let's first talk about policy and financial incentives available for office conversions because they go hand in glove. What do we know about that?
Brad Wellstead: Well, I mean, there's, there's all sorts of challenges and which has come, led to cities and municipalities having to put up incentives to encourage some of this stuff to work.
But, first of all is uh, they may offer expedited permitting. And review processes. A lot of cities, you know, especially larger ones are, pushing nine to 12 months for a permit process. There's also uh, would be the planning board position where there's uh, increase changing the zoning or allowing conditional uses zoning uh, within what's typically been driven as an office type area that's always been kind of a big sticking point.
And so streamlining that process. There's this uh, public private partnerships, so that you know, are very interested in moving forward and creating these new neighborhoods that are driven by the whole new insertion of residential needs, you know, things like grocery stores and, you know, goods and services and home and all those you know, daycare and so on that weren't typically in those locations.
And, um, Some of the incentives also are coming up with creative or you know, new parking solutions or public transportation modifications to make sure that those kind of things keep enhanced.
then on top of that, they look at the financial side of it. Um, you know, states and cities are bringing in situations where, you know, some, you know, in the context that traditional capital sources, you know, they don't tend to be on the forefront of innovation.
And, you know, they're looking at the risks aspects of it. And so, you know, the developers and need to be finding other sources of equity. And so some of these things are coming through and taxes and housing bonds, tax increment financing some light tech situations. If you're, you know, taking it to that level, um, there's always, because of most of these projects are older uh, you know, the, you know, 80 to 100 years old, they could have historic tax credits and then just pure simply pap property tax abatements for a period of time.
So those kinds of things can really soften the Capital needs below for on the equity side for these projects.
Jan DeRoos: you had mentioned when we were chatting about a schedule incentive and that sort of ties hand in glove with a question that's come in as well. So can you let's talk about the schedule incentive what that means?
And then let's talk about that. Also, in the context of, areas that have these incredible, incredibly awful natural disasters, like, we're going to have to really rebuild and provide housing for people in L. A. I live here on the Gulf coast. We just took 3 hurricanes and there's a lot of housing need here.
Um, so let's talk about the incentive and then is that can conversions help solve these these solutions through that scheduling and permitting process.
Brad Wellstead: Okay, I'm, you know, I'm comparing to the, you know, if you were considering a residential ground up development.
So that's the comparison that I'm looking at. And, um, and like, just, for example, used uh, Uh, 10 story building 225, 000 square feet, which is about 200 or so units. and it's in, uh, you know, in this urban area. So a typical ground up building would probably take somewhere on the order of at the start of construction uh, on the order of 24 months being in an urban area.
It's a little longer than some and and so on and so forth. Whereas the conversion, um, You know, you've already got your core and shell, you're going to have to do for a lot of these residential or lodging conversions, a pretty significant remodel and renovation of the interior of the area space.
Um, it's. Not so much in the demolition, although there is some. It's more in the cutting holes through the slabs and making sure that you've got structural things for all the pipes and things for all the new kitchens and bathrooms and so on that are now going down all the way straight to the ground floor and perhaps mostly underground.
And so that takes some time, but that's the two months or so there in the corn shell you see, in this port. And then the interior fit out. You know, a little over a year maybe a little longer than it would be for an office building and or for a brand new building. I should say not office. Um, and it's going to be more time just because it's probably an older bidding and building and there's going to be some contingencies to deal with.
So overall, there's like an 8 month, perhaps pushing a year difference in the delivery on these kinds of things. And so you just in using Chicago statistics, they've got about a 30% For 33 square foot rental rate going on right now. And so, those eight months based on, you know, the leaseable area and so on, you know, leads to actual revenues, additional revenues in those eight months of three, three to almost 4 million bucks and an NOI on a 30 percent expense ratio at about 2.
5 million. So, I'm not going to say that's going to happen all the time, but it certainly can be an advantage.
Jan DeRoos: what's the cumulative impact of these incentives? Does it help reduce costs? I'm seeing again, the questions come in. This is from Ahmed and Alex about some of the incentives being tied to providing affordable housing.
You've got an example of that later that you'll talk about, but just briefly now, um, some of these are. Incentives combined to reduce caught the overall costs or enhance the economics in a significant way. but I've heard numbers anecdotally saying that buildings need to trade at about a 30 to 40 percent discount to make this all work.
Are you hearing echoes of that? Or, you know, what, what's the, what's the skinny on overall costs?
Brad Wellstead: Yeah, that's that sounds it, you know, you know, from a common sense. I haven't done any specific digging into that particular percentage on the discount. But, um, yeah, that sounds like about right. Um, it's, it's you know, so you're picking up the asset on a, on that uh, at a significant discount for sure.
Um, if it's, you're already the owner of the building, then that's becomes a different situation, of course. But, I don't know how you. You know, there's probably some interesting ways to deal with that.
Jan DeRoos: Well, I mean, when you have, you know, elevated, you know, we, we quoted, um, vacancy rates earlier, but we also have elevated defaults and delinquencies in the office space.
You know, they're clearly larger than other property classes right now. And those result in you know, bank sales or, you know, real estate wholesalers from the capital providers that provide, you know, a potential supply of Um, buildings to be converted. Okay, so let's move on a little bit. I'm going to talk about, let's talk about things physically from a physical standpoint.
so what building characteristics make for a good or great conversion candidate and conversely, you know, uh, what, not. Can you walk us through a little bit of that?
Brad Wellstead: I mentioned a couple times already, um, the idea that, um, these need to be older buildings and it's not just because they're older that in class C, but it's more about the fact that older buildings didn't have as large a floor plate as I mean, the floor size as a lot of the more modern office buildings that you find built in the last 30 to 40 years.
You know, 30 years or younger. so like here, for example, to show kind of the opposite of why a new building doesn't work is this is, uh, this is a rather tall building floor plate actually from Hudson Yards in New York City. And it's, it's showing the, Rather large floor plate that with the core in the middle here.
And you have to keep in mind that the module that works for apartments and hotel rooms tends to be this 15 feet by 35 foot kind of Bay. And so that would be the equivalent of, say, one hotel room, or you know, if it was a three, say, a two bedroom apartment, you might take three of those bays, for example, but that 35 feet relative to the distance of the glass to the core is 60 feet, and even with the corridor incorporated into their, you know, Kicks us up to 40 feet.
You end up with a lot of unusable area that you just there's nothing you can do with because in hotels and residential, you have to have natural light, sometimes ventilation to for each of the living for at least the living areas and sometimes, you know, bedrooms is desirable. So that's what makes them less.
Does it workable? But if you look at, for example, school. Chicago's been quite forward in their program in their LaSalle, they call the LaSalle Street Corridor, and that is a great example. They had like a series of, I don't know, half a dozen to a dozen buildings that they kind of put out. For strictly for the purposes of these kinds of conversions with all sorts of incentives and so on.
So they put out an RFP and this is one of the examples on to await South Laos South Street that shows you that they were taking the middle, um, looks like about, I don't know, five or six stories there, sandwiched between two hotel properties uh, JW Marriott on the ground floor, that red area that is in an autograph collection, LaSalle Hotel on the uppers, and these, these six stories in between housing about a 280 apartments.
So if we take a look at the floor plate for that, then you can see how this works where they have not only, And this is how they laid out the apartments in this thing, where it's a 52 foot wide corridor and, or I'm sorry, area on the in the actual building in that area, because they have this light well here and 80 feet on the ends.
So they've actually been able to do a double loaded corridor of units. And it's not only on the exterior perimeter, but also on the interior perimeter that allowed them to put all these units into this situation. And this is one of the more successful versions that was presented. So, I mean, this building was built in 1914.
Daniel Barnum, famous architect in the time, did a lot of beautiful buildings, and now it's being used in this way, and it's really pretty cool.
Jan DeRoos: Barham is famous for his quote, make no little plans which I think is a great quote. Um, the thing, 1 of the things that's interesting about this is 30 percent of those units are according to what's called the affectable requirement ordinance in the city of Chicago.
So, 30 percent of these are affordable and that's uh, helping to not solve a homeless problem, but it certainly solves a housing shortage or a shortage of affordable housing or helps to. I'm not saying it's the solution, but it can certainly go some way there. So we've been, we've been talking about the benefits of this the whole time.
Let's talk now about some of the economics and then some of the barriers to this. Okay. So I'm going to tell a very simple story and then, you know, it's sort of a, you know, and then ask you to react to it. But so let's just think about the achieved revenue per square foot of a building, you know, and so in Chicago, let's just assume that rents are roughly the same for office or residential, right?
Simply the, um, the buildings have, and then if buildings have roughly the same rent, the one with the highest occupancy rate is going to win, right? Uh, Okay. And then with a hotel, you can take it as an adjusted rate in terms of revenue per square foot because the occupancy varies from day to day, is the economics of conversion as simple as I framed it with a story that residential properties over the long term appear to have a higher projected occupancy than office and therefore it makes sense to start thinking about converting them because that 20% Vacancy in office versus 5 percent vacancy and apartments is a pretty compelling delta to work with.
Brad Wellstead: So, on the face of that, yeah, that's, that's really what's driving is the occupancy. If the rates are the same, then, of course, the, you know, if you're getting a 10 to 15 percent bump in occupancy from 20 percent vacancy to 5 percent vacancy, for example, Then, that's going to change things a lot.
And then on top of that, the from the economics point of view, being able to perhaps purchase it at a discount is going to make a significant difference. I mean, we just you're basically comparing the construction cost. Gosh, it's a thousand square dollars per square foot in New York City now.
And, you know, I don't know what it is in Chicago, for example, but, if you're buying it for less than the core and shell for less than that, you're ahead of the game a lot on the, you know, your, your hard cost of constructions. Um, for everyone listening here, it's, you know, it's, it's really going to be that play and that specific analysis, though, of, you know, those major hard cost factors and the occupancy driving it, not every city's got that, unfortunately, you know, I mean, some, there's too much of a delta in the rates, for example, you know, if you were at, uh, 30 percent or 30 a square foot rate for residential and you're got 50 a square foot for for office.
You know, that's going to make it a difficult, difficult deal.
Jan DeRoos: That'll that'll never work. Yeah. So, so the narrowing down, it's, it's somewhat what I'll call equivalence, not on the rents per se, but in terms of the achieved rent for for actual rentable square foot. Okay. Right, um, is higher in in this use than in that use.
And that's what's going to drive the conversions long term. But there has to be some notion again, we back to this notion that long term, the office vacancy will is structurally elevated, at least in at least in what I'll call the medium term, 10 to 15 years, we can, we can build to it. In the longer term, it's a question from Carol.
She has a really interesting question. It seems that the back of the office push is driven by a significant amount of, um, revenues that leases are losing because workers do not require this uh, the space that they did before. So you have some firms that have figured it out and have, you know, you're in the office two days, you're in the office three days, and we can meet in conference rooms and be much more efficient.
So the amount of square foot needed per. Person goes down as well as you know, maybe some of those ancillary services just aren't being used that much anymore Because i've made other arrangements not for daycare because i'm in the office two days a week So I don't need daycare at the office. I don't buy my lunch as much in the office or you know, so um, and that's driving some of these, changes as well any any response to that
Brad Wellstead: the square foot per worker per employee, let's say, definitely is going down. And there's been you know, some, most of the major architectural, firms in the country Gensler is one that comes to mind that has spent a lot of time and offered a lot of, of their own internal research with regards to how to configure their, An office space with, you know, you've got 400 employees, but only 200 or 250 are there at any given time.
And so there's a lot of creative and innovative things and hoteling space, they call it. and just. Places where you can land in hot seats and, you know, you don't have a private office anymore if you need privacy, they have, you know, um, this has been around for several years, but it's really come to a whole different push on the dynamic of making this need.
Work for it. And the, the benefits, you know, the PERT type stuff. Yeah, that makes sense. And it's kind of a shame, but it hopefully that then becomes driven into things that are happening down on the street rather than by the particular office itself, like daycare and ping pong and beer taps.
Jan DeRoos: Well, I mean, I, I also, I mean, I've. Um, do enough travel to know that, um, the cityscapes were even evolving where we're having more residential relative to the office, things like food halls, as opposed to some sort of more buried, um, food service that really you walk past because you're going to the elevators and you're in the building.
But if you were walking the street, you'd never be aware that there is a food service establishment in the ground floor of something. Those things are, I think help to animate the city. The cities as well. now let's talk about the barriers to conversions. Um, and first, what are the, so what are the big policy barriers and what can be done to maybe mitigate them?
Well, I mean, zoning is always the bogey. So
Brad Wellstead: it totally is. I mean, it's like, everybody says, oh, yeah, this is great. Good idea. The mayor's all in for it and blah, blah, blah. And then all of a sudden, the zoning department says, no, we can't do that. and I'm not. Blasting zoning departments, but their charge is to enforce the notion of why zoning existed in the 1st place.
But, to allow for that flexibility, that can make a big difference.
Jan DeRoos: Well, I was on a board of zoning appeal. So, and I get it. People are asking to quote unquote, break the law and the zoning department simply asked to enforce what's in the law. But, um, so isn't that more? And I mean, we always used to argue.
This is the domain of the city council. The city can change the law and then we'll enforce them. Um, so absolutely.
Brad Wellstead: Okay. Yeah. I mean, it's going to take top down authorizations and, you know, that kind of. Change to make things happen. I don't know how quickly those kinds of things can happen, you know, and frankly, I mean, these even the looking at the Chicago projects, you know, they were all ready to go 2.
5, 3 years ago, and in doing a little research, even on this particular project that we were just looking at, there's been 2 years of it. Fussing around probably both, permitting zoning as well as financing, getting into place that they hadn't necessarily accounted for early on in their presentation.
and then, you know, things. Parking and loading area requirements, you know, a subset of the zoning regulations, you know, those can become huge barriers because all of a sudden you've got, 200 residents, you know, 200 cars that need a place to go. That there wasn't needed that before.
Jan DeRoos: Yeah, the need is just the opposite, right?
In an office building, the cars that are during the day, they're going at night, where in a residence, the cars are going during the day, and people want to park them overnight. And it's just a different flip flop of the parking and the parking need. But. I mean, you can monetize that, right? You can either sell parking or somebody, you know, each unit comes with X amount of titled parking as well.
So people don't have, you know, 2, 3, 4 vehicles because it's becomes expensive to store them. Oh
Brad Wellstead: yeah, it's crazy. and I think part of the hope is that, you know, you're creating a situation where people don't require use of a car 100 percent of the time. And, you know, where they're either using public transport or other means or can walk to everything that they need.
So, that's part of the, kind of the soft incentive Other challenges too, you know, there's You know, as I kind of went through, you know, the remodeling process, I mean, the life safety and requirements and egress requirements are similar, but they it just is multiplied by from an office where it's not on the.
Residential module, for example, for example, you're going to be, you know, changing all the sprinklers, changing all the fire alarms and destinations and, creating situations where walls need to be of different characters and so on and so forth. And, you know, then there's other barriers, like I was just, I was reading about, like, you know, all of a sudden you're putting in.
Compared to an office space in this, and again, in the LaSalle situation, you're adding in 280 kitchens and toilets and bathrooms and such like that. The actual, the water usage is going to go way up, so there's going to be a utility infrastructure impact as well that is going to be negotiated with whoever's pulling that all together.
So, I mean, there's a lot of like those kinds of barriers. I mean, it was like residential relative to office was like. Twice the amount of consumption. And so it's, it's kind of enormous when you think about what that means for, okay, we have to upgrade the water service, both going in and out. So, those are some of those things, you know, that you're going to have to face. And, I noticed that this is my project management brain coming out. I noticed that, you know, looking at all the budgets that were presented during that RP in Chicago, um, you know, they had, like, 10%, which, typically more, you know, new building might be in the 5 to 6 percent range or something.
So
Jan DeRoos: I'm sorry. I didn't catch 10 percent of what
Brad Wellstead: of the cost of construction as contingency. And, I don't know. I, I think that's a little aggressive. In the wrong way. Like, I think it should be more. Most likely, you should be prepared for more than a 10 percent contingency in these situations. Being in an older building and just all the surprises that you're going to come in and find.
Jan DeRoos: Okay.
Brad Wellstead: So, I
Jan DeRoos: do you have any examples of sort of a quick, Case study that would be which showcase the success of the financial model and how many years it takes to recover the additional capital investment. Are these like 5 year paybacks or are these long term? My sense is these are long term changes to the fundamental mission of this building.
Um, and these are penciled at a time frame. 710 ish year hold, not a quick flip you know, convert and flip. Although you could do that if, you know, sometimes the strategy would be to buy something, fix its problems and then flip it based on expected future cash flows.
Brad Wellstead: I, I tend to agree with you on the longterm thing.
I don't have any specific examples at my fingertips, but, um, I mean, I think about the Liberty hotel in Boston, for example, which switched to, to It wasn't an office building, it was a prison into a hotel. And that's been wildly successful, I'm sure, it's been a long, around a long time.
But, that's more of an adaptive reuse than an office conversion. But, I think about the capital costs of bringing this together. I mean, even if you get the discount and you've got, you know, 50, in this case, the project, the LaSalle project was a good 50 to 60 million of overall cost construction, and on top of that more, um, you know, it's a significant investment that it's going to take a while for that to, be start cash flowing back above that.
So, yeah, I think it's a longer term hold, especially if we're trying to cover losses from not doing anything for a while.
Jan DeRoos: Okay, we have a question from Rewa, and this gets to hotel uses, and what she asks, is there a possibility of the government getting involved in conversions to house homeless people or immigrants, and I just want to, answer this question a little bit from my knowledge that many cities, New York City being a lead on this have been using hotels, um, and basically taking over entire hotels and using them to house both immigrants and homeless for the last few years.
The, the cities that do that are typically would identify themselves as sanctuary cities, and then they would identify these places for housing. Not all cities are doing it obviously, but cities have recognized this role in the past, and, now the, I, I think a, a good question is can they be, can the housing for immigrants and homeless can that be found in these office buildings in addition to uh, these sort of what I'll call fairly painless conversions of converting, of taking whole hotels.
Brad Wellstead: it's gonna take a, a special set of circumstances and it has, you know, and I acknowledge the ones in, in New York City for sure. And there's others around, you know, LA and others are, are doing that same strategy even here where I'm at in Oregon, at Portland, um, in Seattle, in the Pacific Northwest.
so it's a, it's a great. Idea, and it works fine. Um, to the extent that it fits into the conversion model, um, which I think was the question. Um, I, you know, you've got a two year window there. And, I guess I was thinking about also the refugees from the Los Angeles fire. So is, you know, that from the timing point of view would be Not enough, but the
Jan DeRoos: solution there in terms of housing has we have decent solutions there.
We've seen them already with some of the hurricane activity from the lane. This last year is I will call it FEMA housing and they're able to rapidly deploy at least short term housing for folks. Now, long term structural. I mean, I mean, that's not what this webinar is about. This is really about converting underutilized office buildings into other space.
So, do you have any last minute thoughts for folks as you, you know, say you want to explore this or take a look at it. Um, here's some things that you should think about if you approach it.
Brad Wellstead: Well, I think we've touched base on most of the requirements or, you know, most of the high level requirements and characteristics of it.
it's, it's been super fun just, you know, getting, you know, Digging into all of this and being part of it. And uh, I think this is the kind of thing that cities need and that it's the sort of situation where the creations of neighborhoods that reinforce community and, you know, change the dynamic of things that are happening in these sometimes not so active urban areas.
Can really make a difference to what it is to live in a city again and, change it to, making it into productive in a way to participate in those communities in a whole different manner. So, No, there overarching.
Jan DeRoos: Yeah, this is a partial solution to a fairly large phenomenon, and the solutions are going to be different whether you're an urban cores or suburban or.
I would say more one off properties, but since the office buildings tend to cluster, there's opportunities, I think, in a very large number of places for conversions, whether they're residential or other uses. Thanks for listening to Cornell Keynotes. Check out the episode notes for information on Jan de Roos and Brad Wellstead's online certificate programs in real estate from eCornell. Thank you again, friends, and please subscribe to stay in touch.