The landscape is quickly shifting for commercial property owners in Ottawa. With high vacancy in federal office buildings and the government working to solve a national housing shortage, a never-before-seen window has opened, allowing commercial landlords working with an experienced development partner to rethink how their properties are used and realize increased value on their assets. The Canadian Urban Institute identified Ottawa as a city with very high potential for successful conversions.
Office conversions to residential units are a highly profitable venture when managed effectively. For property owners considering this route, the first and most important question to ask is this: Is my office building eligible for conversion to residential? There are some key factors that can be identified by a trusted development partner.
While many types of commercial buildings can be converted to residential units, there are a number of key attributes that make specific office spaces ideal for this kind of project.
First and foremost is the old real estate adage: location, location, location. Buildings set in communities that are already attractive areas for renters will be much easier to fill. You should also consider what services are available nearby; grocery stores, schools, hospitals, transit, and social spaces are all important to potential tenants looking to be a part of a vibrant community.
There are many qualities of the physical building that contribute to eligibility for conversion, as well. Things to consider include the following:
Answering “yes” to these questions could mean a building is prime for an efficient conversion. It is important to speak with your development partner to identify these and other factors before beginning work on the conversion project.
The greatest reason to explore an office conversion to residential units is to create additional value in your property. Commercial property owners often see a decline in their tenant base due to factors including the age or location of their building. These offices are unlikely to get new commercial tenants in Ottawa’s current climate, meaning other avenues need to be explored.
When completed efficiently, office conversions can be a hugely profitable venture. Working with an experienced development partner is vital to realize the most value in your project; not only will they be able to properly identify an eligible building, they will also find efficiencies and value adds throughout the process—such as ways to reuse materials or which amenity spaces to install—while keeping things on track from start to finish and beyond.
Another piece of the puzzle is more personal: Do you see these buildings as part of your long-term portfolio? Commercial property owners are often concerned about coordinating the conversion process as well as needing to operate a multi-residential apartment once the project is complete.
There are options available to property owners who want to realize the value of an office conversion to residential units but may not be interested in managing the building after the fact. The option to sell the building—either before you begin the process or after the conversion—can be an attractive one. Alternatively, property management firms are available to take over building operations once the conversion is complete, allowing property owners to maintain their portfolios without needing to deal with the day-to-day problems that arise from overseeing a residential building.
If you think your building may be eligible for conversion, it’s about time to take the first step. Getting the process started can be difficult, but working with a trusted development partner who has successfully executed these conversions will ensure you’re set up for success.
JBPA Developments is uniquely positioned to lead this process, having completed a number of efficient, profitable conversions. Contact us to learn if your building is eligible for conversion.