Two trends are converging across the country, including in my own San Diego market. These include a softening in the office sector and a dramatic shortage of housing. What we’re seeing is developers looking at ways to repurpose office parks into residential buildings and communities. That’s how you get headlines like this one from the San Diego Union-Tribune: “Developer to revamp offices into housing.” I have five recommendations to attract and retain residents for this firm, as well as for any other developer that wants to build housing in employment centers.
Why should they concern themselves with the suggestions of a journalist, you (and they) might ask? My decades of professional experience as a wellness design consultant and personal experience as a homebuyer could help them make their projects more appealing and successful.
Conversion Imperative
Chris Nebenzahl with real estate advisory firm John Burns Research & Consulting expects to see more offices torn down in favor of residential projects, he told me in a February 5 email. “The office to residential conversion story has been a hot topic in the past few years, especially as demand for office space has changed through and after COVID.”
He points to falling values for 1970s and 1980s suburban office values, directly attributable to COVID sending companies to hybrid or remote work situations. “While many companies are returning to the office, I expect a significantly larger percentage of the labor force will work from home indefinitely compared to pre-COVID,” he wrote. He identified mid-quality office buildings that were struggling before the pandemic as the likely prospects for tear-down and residential construction. (The development being repurposed in the first paragraph was built in 1986.)
Location Challenges
I believe this local conversion example provides a paradigmatic example of what can – and should – be achieved. According to the article, the developer will replace a four story office building with a five or six story residential complex. “It’s a little bit pioneering, where we’re bringing multifamily (housing) into an area … where there is not a lot of residential,” JPI executive Seth Dorros told the newspaper. Praising the location in the city’s life sciences hub, he noted, “You’re close to the beaches, but also you’re close to employment.”
You know what you’re not especially close to? Supermarkets, pharmacies, coffee shops, cafes, libraries and the other services that residents depend upon. Yes, you can drive to these in 10 or 20 minutes, but surveys show that people continually prize walkability as a community feature. After spending hours in traffic driving home from work, do you really want to get back in the car to get dinner or enjoy your weekend time?
Given zoning typical of cities and suburbs across the country, office, industrial and residential areas are typically distinct. That means getting to your job or shopping from home requires driving, taxi or ride share, or public transit. The third is rarely practical, especially for food shopping, and the second can be prohibitively expensive on a regular basis.
Suburban-style living has the benefit of being quieter, greener and typically offering amenities like community recreation centers less available to urbanites. (As a New York City transplant, I’ve lived and loved the contrast!)
Recommendation #1 – Build In Walkability
This developer and others should look at adding a supermarket tenant to the ground level of their new building. Other retail can include a coffee chain, mailbox store, pharmacy (if not built into the supermarket), health clinic and café/deli/takeout spot. You want to make it possible for residents to handle personal needs without driving to the greatest extent possible.
This can attract time-pressed urban transplants like myself, but also older adults who may have vision challenges making it harder for them to drive, especially at night. It’s also more family friendly for mom or dad to send junior to the store downstairs.
Developers should also look at adding a pocket park and playground amenities to the community to attract young families. A bonus room that can serve as a free library/reading/study room would be appealing to many residents as well.
Another aspect of walkability are soft, shaded paths to mini features – perhaps a gazebo for weekend concerts or to an area with food trucks on the weekend.
Recommendation #2 – Build In Social Features
With more single adults than ever before, creating social features on site reduces loneliness and enhances the feelings of connectivity that can turn new buildings into welcoming communities. These spaces should be both indoor – e.g., on-site coffee house, game room – and outdoor with natural elements like trees for shade and planters for beauty. Community gardens can be a desirable feature. So can weekend farmer’s markets and food trucks.
Recommendation #3 – Build In Wellness Features
As I reported last year for trade publication Multi-Housing News, wellness services are becoming increasingly popular amenities in new developments. They don’t even need to be a cost center. There are different business models to consider, but having a clinic on site can be extremely appealing to residents of all ages.
Other wellness features worth considering are a fitness room, sauna/steam room, roof garden for outdoor yoga practice, and the afore-mentioned community garden. Providing fitness services with local providers at a discount for residents can be a boon and enhance the desirability of your building.
The units themselves should include air and water filtration, technology like smart locks, circadian lighting and automated window coverings. And be sure to choose nontoxic finishes, electric fireplaces over gas and induction cooktops or ranges. Consider WELL certification for your property.
Recommendation #4 – Build In Resilience Features
If you’re in a fire zone, build to Wildfire Prepared Home standards that exceed local codes for reducing fire risk. (Yes, they’re intended for single family homes, but many of the principles are transferrable.) If you’re in a hurricane zone, build to increase storm survivability. Include solar panels and optional battery storage to keep units powered during outages regardless of location. These resilience features are increasingly popular with home seekers, as Babcock Ranch in Southwest Florida demonstrated after surviving Hurricane Ian unscathed.
Recommendation #5 – Build in Sustainability Features
Solar panels are a potential resilience feature, but they also appeal to a growing concern for protecting the earth. Offering EV chargers in the parking garage can attract residents with electric cars. Building to LEED standards attracts an educated, affluent prospect. According to the latest ASID Trend Outlook, people will pay a 10 to 15% premium for sustainability features.
Conclusions
These may not be what this developer has in mind for their community, but these recommendations can help others attract residents that will not only be drawn to check out the community for themselves, but love it so much that they recommend it to friends and family. And if you’re seeking a new suburban home for yourself or your household, these are all features worth considering for your next residence.
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