Looking Into Office Conversions? Get Instant Insights with the Conversion Feasibility Index on PropertyShark

While the U.S. office market struggles with high vacancy rates, the multifamily sector continues to see high demand both from the average consumer as well as developers and investors. And, although there is significant momentum for office-to-residential conversions in the public sphere, real estate professionals are much more aware of the challenges such adaptive reuse projects present.

To assist commercial real estate professionals in identifying office buildings with strong conversion potential, CommercialEdge — a sister company of PropertyShark focused on serving commercial real estate professionals — developed the Conversion Feasibility Index (CFI), now also available on PropertyShark.*

What Is the Conversion Feasibility Index?

The Conversion Feasibility Index is a proprietary tool designed to assess the potential for successfully converting existing office buildings into multifamily properties. It helps investors, developers and other real estate professionals prioritize projects with the highest potential for success and even make at-a-glance decisions on candidate properties.

For example, you can find an office building’s CFI score directly in the property report, allowing you to instantly move on if the property does not fit your criteria. You can also use it as a search criterion when prospecting, building property lists or researching maps, helping you to easily target buildings with conversion potential. For more precise results, combine your CFI range with other search criteria such as square footage, year built, zoning, maturity date, distress status and more.

How Does the Conversion Feasibility Index Work?

The Conversion Feasibility Index works by assigning property-level scores for office buildings, taking into account a wide range of property characteristics that all have a significant impact on the potential for conversion:

• Building characteristics such as age, total square footage, number of stories, building depth, primary use subtype.
• Architectural features such as floor plate shape, ceiling height, green building certifications.
• Location: mid-block positioning, proximity to mass transit, walkability.

Each feature receives a weighted score based on its importance and impact on a potential office-to-residential conversion and the points are added up to determine the property’s Conversion Feasibility Index. The higher the score, the higher the property’s likelihood for a successful conversion.

To further simplify decision-making, scores are split into three tiers:

• Tier I: Top Conversion Candidates 

Score: 90-100 points

Office buildings that incorporate the most favorable characteristics for conversion, making them prime candidates with a high likelihood of success. Typically, only minimal modifications are required, since they are already well-suited for residential use.

• Tier II: Quality Conversion Candidates

Score: 75-89 points 

Office buildings in this range still show strong potential for conversion but will likely require additional modifications or adjustments. While they are still viable for conversion, the process will likely involve more planning to overcome design or structural challenges to be compatible with residential use.

• Tier III: More Difficult Conversion Candidates 

Score: 0-74 points

Office buildings with strong limitations and challenges that make conversion a complex and often costly endeavor. They are likely to require extensive modifications or creative solutions to make the conversion feasible and developers will need to approach these projects with caution, weighing the costs and potential risks. Often, these buildings are not financially sound conversion candidates, with conversions costs far outweighing potential profits.

Visualizing CFI in NYC’s Office Landscape: Conversion Candidates on Maps

Whether you’re interested in a general overview of the city’s office buildings with conversion potential or want to explore at the neighborhood or even block level, use the CFI as search filter on NYC maps.

Zoom in and out for closer details or macro trends, open mini property reports by simply clicking on a building or open the full report with just one more click. You can also combine CFI criteria with dozens of other map layers and search filters to finetune your results, including school districts, zoning, traffic, green buildings, construction pipeline, tax value, air right and much more.

Why Use the CFI? How Real Estate Professionals Can Benefit

The CFI allows real estate professionals to quickly assess the potential for converting existing office buildings into multifamily residential properties. Traditional methods of finding office buildings that are suitable conversion candidates require significant time and resource investments, with most documentation needing manual research.

With the CFI, you can eliminate much of the initial research of determining whether or not a building can be converted, long before you even consider any cost-benefit analysis. A simple address search or click on a map will pull up an office building’s property report where the CFI is displayed on the first page. This way, you only need a few seconds to determine whether or not an office building is a viable candidate for multifamily conversion.

Regardless of your role in real estate, the CFI can improve:

Easy access to reliable conversion feasibility data, along with other information such as nearby construction pipelines or a property’s debt-service-coverage ratio (DSCR) estimate, empowers investors, developers and other real estate professionals to identify new opportunities and streamline the decision-making process.

Property Data Sources & CFI Coverage

The CFI is built upon a proprietary algorithm, using data from multiple official, verified sources, including the New York City Department of Buildings (DOB), real estate permits, and a wide range of public records. Data is regularly updated to ensure the most accurate and recent information about NYC office buildings and potential conversions. On PropertyShark, you can find a CFI score for all NYC office buildings larger than 25,000 square feet.

Conclusion

The CFI feature on PropertyShark is a game-changer for anyone involved in NYC real estate. By providing a comprehensive and easy-to-use tool for visualizing a building’s CFI, it empowers you to make better decisions, save time, and stay ahead of market trends. Whether you are a developer, investor, appraiser, or broker, the CFI feature offers invaluable insights that can transform your research process and increase project outcomes.

Availability*

The Conversion Feasibility Index is available for NYC and can be viewed by PropertyShark subscribers with a NYC or nationwide Platinum plan.

Disclaimer

This article is intended for educational and information purposes only and should not be construed as legal or investment advice.