Office-to-residential building conversions

Canadian Property Management | June 20, 2024
Paul Fritze, BASc, P.Eng. | Principal

Top 5 considerations that could make or break your project

In a post-covid world, office vacancies have risen dramatically just as residential vacancies have declined to crisis lows. Naturally, building conversions have emerged as a potential solution for owners and developers seeking to capitalize on their languishing assets. While an attractive option at face value, the adaptive re-use of existing commercial office buildings to residential rental apartments does pose several challenges despite the obvious benefits and isn’t financially viable for every vacant property.

“When income statements yield dramatically lower revenues, the excitement to pivot and convert unused office space into residential apartments is warranted,” explains Paul Fritze, Principal at RJC Engineers. “But not all vacant buildings are a good candidate for this opportunity.”

According to Fritze, here are five key considerations when determining which properties are right for building conversions:

Zoning, Permitting & the Legal Landscape

One of the main benefits of converting office buildings into residential apartments is the potential cost and time savings compared to new developments. However, these advantages can be negated if developers encounter significant hurdles in meeting residential municipal zoning requirements.

“Conducting a thorough planning study during the due diligence phase will identify zoning and permitting requirements early,” advises Fritze. “A proactive approach helps avoid, or at least minimize, the need for zoning amendments, which can save time and resources.”

Residential vs. Commercial Requirements

When converting commercial spaces to residential use, developers must look for specific building features and requirements that are integral for the new use; this includes window placement and ventilation systems; fire safety and egress routes; plumbing and electrical systems; and sound attenuation between the units.

“Typically, residential buildings have more stringent requirements,” Fritze says. “For example, apartment units require more extensive plumbing for kitchens and bathrooms, and electrical systems must be designed to handle higher loads due to appliances and lighting.

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