Converting Commercial Buildings: Top Takeaways from CREW’s June Panel

Building geometry plays a huge role in determining livable apartment layouts. It can be unclear which underused buildings are suitable for housing conversions, but it is not a one-size-fits-all approach. A good candidate has a combination of the right floor plate depth, structural capacity, age, and location. With narrower floor plates and access to windows, sufficient sunlight and fresh air can reach each residential unit. Having the right kind of shafts for stairs, elevators, and mechanical systems make a huge difference to accommodating the building for living use. Analyzing these factors through early feasibility studies inform developers whether a building has the right characteristics for a successful residential conversion.

Before diving into redesigning 2601 Elliott, an early twentieth-century cannery, Gensler and Coughlin Porter Lundeen conducted studies that determined the building’s ability to be transformed. Structural Engineering Principal Bryan Zagers discovered hidden opportunities within the building’s existing concrete structure.

“We looked at ways that could leverage the building’s extra structural capacity and address seismic requirements. By using the extra capacity of the columns and piles, we can put in steel bracing. We worked with Gensler and JP to locate those braces throughout the building where they wouldn’t impact unit layouts or at least had minimal impact,” Bryan said.

Opportunity: Bringing in experienced design and engineering professionals early in the process swiftly determines risks and opportunities within buildings before significant investments are made.

Municipal governments generally support commercial-to-residential conversions as a strategy to address housing needs, creating opportunities for collaboration between developers and jurisdictions. While these projects require unique planning and permitting considerations, proactive coordination aligns regulatory requirements, scheduling, and delivering housing benefits to the community more efficiently.

“There’s a lot of really creative people out there that believe in these conversions, and the cities want to believe,” said Emily, Co-Owner and Founder of Sage Investment Group. “The biggest thing that is causing me to kill deals is when Jeff comes to me or our team comes to me and says, we’re worried about this city. If we have any hesitation, we don’t move forward. Local municipalities and inspections need to be comfortable with what we’re asking of them for a conversion.”

Opportunity: Early discussions with the city prevent delays, lead to greater flexibility during the project approval process, and the ability to quickly determine whether a project can move forward.

Strategic conversions can reactivate declining neighborhoods and support downtown recovery. Underutilized hotels and offices turn into productive community assets, while offering homes to the “missing middle.” Working class tenants, young professionals, and seniors have greater access to attainable housing options. In some cases, adaptive reuse projects reduce blight and lower crime by introducing higher occupancy to a neighborhood.

Emily gave an example: “What happens when a hotel becomes less desirable or not used as much? We see a lot of deferred maintenance, and once that sets in, the next thing you know, crime sets in. We own four properties on a particular street in Kirkland, and it averaged about 19 homicides a year when we bought them. Since then, we’ve seen a 70% reduction in crime and 100% reduction in violent crime. There has not been a homicide on that street in three years.”

Opportunity: Stable housing can provide multiple community benefits and improve quality of life.

Each commercial-to-residential conversion is unique and comes with its own set of opportunities and potential solutions. Creative project teams with local adaptive reuse experience are key to successful projects, since they know how to coordinate with city officials and assess nuanced challenges.

“I think a lot of engineers can look at something and think there’s a lot wrong with these old buildings. There’s always going to be challenges, and the temptation is to say all of these things are big, scary red flags. Sometimes they are, and we’re not afraid to say right away that they might be,” Bryan said. “But some of those things are yellow flags; we just need to understand them a little bit better. Maybe we need to talk to the city. And then there’s green flags. Maybe a building has excess structural capacity for future expansion, like we found at 2601 Elliott. So just getting in there and finding the good, the bad, and the ugly helps to make smart decisions quickly.”

Opportunity: The key to overcoming obstacles and delivering successful projects lies in establishing a creative, experienced team with a portfolio of local conversion projects and close coordination with city officials and inspectors.

Through careful planning and the right combination of building conditions, commercial-to-residential conversions offer the chance to repurpose underused buildings, revitalize neighborhoods, and provide more housing. Projects such as 2601 Elliott and the Kirkland hotel transformations prove that success lies in strategic building selection and creative design. As cities seek innovative ways to address housing demand, the discussion is shifting away from “Can this building be converted?” to “What does it take to make this conversion successful?” Collaboration between building owners, developers, architects, engineers, and city officials unlocks opportunities and unveils creative solutions to make these projects happen.

Are you ready to repurpose commercial property for residential use? You can reach out to Bryan Zagers directly to learn more.