The added financial value of office conversion into housing

Abstract

Conversion into housing can contribute to the expansion of the housing supply and at the same time offer a solution for office buildings that are no longer eligible for the office function. Yet, postponing and denial are still common used strategies by offices owners. Financial motives and the project complexity of adaptive re-use crucial barriers to entry this sector of property development. Financially unfeasibility of conversion is usually caused by a difference in the perceived value of vacant offices. The residual value a developer would pay for a property, often is not in line with the price (the capitalized rental value) that the investor desires to receive. For that reason, this research is focusing on to which extent converting structurally vacant offices into residential use adds financial value to the property. Furthermore, this research explores who appropriates this added financial value.Real Estate ManagementReal Estate and HousingArchitecture and The Built Environmen