#1,803 - Office space glut so big that Boston will offer 75% tax breaks on office-to-residential conversions
News For Reasonable People
English - July 18, 2023 10:00 - 28 minutes - 20 MB - ★★★★★ - 7 ratingsInvesting Business Entrepreneurship san francisco trending news protests defund the police antifa blm seattle conservative republican journalism Homepage Download Apple Podcasts Google Podcasts Overcast Castro Pocket Casts RSS feed
All eyes are on the office sector, watching as it largely unravels in the aftermath of the pandemic. And as the billionaire developer, Ross Perot Jr., recently told Fortune, “it’ll be years before we really understand the damage the pandemic did to the world,” adding that for one, “it broke the habit patterns of millions of people that used to go to work every day in a real office.”
Office vacancy rates have reached record highs in many major markets as employees lean into remote and hybrid work. With that, office property values are falling at a time of high interest rates and tightened credit (which in turn raises borrowing costs and generally makes it more difficult to borrow or even refinance). So it’s likely there will be an increase in delinquencies and defaults, with some office owners turning in the keys.
But here’s the thing, there’s also a housing market shortage. Which brings us to the question a lot of people are asking: why not convert these empty, obsolete office buildings into housing?
On Monday, Boston Mayor Michelle Wu announced a residential conversion program for downtown offices, to “meet City goals of creating housing units Downtown and having more consistent foot traffic throughout the week to support Downtown businesses,” the release said.
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