Some office buildings are easier to convert into apartments than others. Glass-and-steel skyscrapers from the 1970s, with their deep floor plates and bulky cores, are particularly difficult to transform while pre-war, brick-and-mortar buildings are uniquely suited for cozy homes.
In Boston, three real estate development groups—Boston Pinnacle Properties, KS Partners, and Equity Residential—have filed applications to convert a total 104,000 square feet of office space into 170 apartments. The office-to-residential conversion plans, submitted to the Boston Planning and Development Agency (BPDA), pertain to eight buildings in downtown Boston near the Rose Kennedy Greenway and the West End.
The eight implicated buildings each fall under the categories of Class B and Class C office space. Class A office buildings typically encompass newer, more sleek towers with modern amenities. These older, Class B and Class C “less desirable” office buildings plummeted in value during COVID, as millions of Bostonians opted to work from home. Today, the city has made converting Class B and Class C office buildings into residential usage a top priority to plug its housing shortage.
The conversions are happening as part of a new short-term tax break program backed by the BPDA. The program incentivizes real estate groups with steep discounts on property taxes to convert Class B and Class C office buildings into apartments. In short, the pilot allows property owners to switch from designated commercial property tax rates (currently $24.68 per $1,000 of assessed value) to a residential property tax rate ($10.74 per $1,000 of value).
One of the implicated buildings is a brick-and-mortar six-story edifice at 281 Franklin Street in Boston’s Financial District. Boston Pinnacle Properties is under contract to buy 281 Franklin for $2.8 million, where the real estate group hopes to install fifteen apartments.
Similar plans are underway in cities around the U.S. In New York, the Adams administration rolled out its Midtown South Neighborhood Plan. This program rezoned Manhattan south of 59th Street to spur office-to-residential conversions. Last month, Gensler successfully completed converting 160 Water Street, a 1970s office building, in New York’s Seaport district into 588 units.