AYESHA RASCOE, HOST:
Just outside Dupont Circle in Washington, D.C., sits an office building you could find in almost any downtown in the U.S. - big, gray, industrial.
What style would you say? Is this brutalist or is this...
MATT PESTRONK: It was - it's faux brutalist. They...
RASCOE: Faux brutalist.
PESTRONK: I don't know if anyone ever thought it was good-looking.
RASCOE: OK (laughter).
OK. Matt Pestronk is the president of Post Brothers, a development company. His team plans to transform this old vacant office building into more than 500 luxury apartments.
PESTRONK: The building was developed with the original main tenant in the early 1960s was a Civil Aeronautics Board. They were mostly in the south building.
RASCOE: Cities across the country are dealing with two parallel problems. One, there's too much empty office space, and two, there's not enough housing. Office vacancy rates hit record highs during the pandemic, and the housing shortage is estimated to be in the millions. A lot of cities, including D.C., are trying to meet that demand for housing by converting old office buildings like this one, but it's not easy.
So we're walking down kind of a dank hallway (laughter), like, a little dim.
PESTRONK: Chronicling the failure of an office building as an office building.
RASCOE: (Laughter) Yeah.
The biggest challenge to turning offices into homes is natural light. Unlike a cubicle, each apartment needs windows.
PESTRONK: Let's go over here.
RASCOE: Yes.
PESTRONK: Look, there's all this window line.
RASCOE: Yes.
PESTRONK: The reason it's so dark is because it's carved up like a rabbit warren with walls.
RASCOE: Yes.
PESTRONK: When you take these walls and configure this as apartments, it'll be incredibly bright.
RASCOE: And so, like, these windows right here, are they going to be bigger or are they going to be...
PESTRONK: Yes.
RASCOE: OK.
PESTRONK: They're going to be equally high, and they're going to be a little wider.
RASCOE: The popcorn-textured ceiling, that's coming down.
PESTRONK: Oh, yeah. This is what they call a drop ceiling. There's about a foot of ceiling above this.
RASCOE: This one office suite, formerly occupied by AmeriCorps, will make six or seven apartments.
PESTRONK: But no part of this office suite will be preserved.
RASCOE: In the lobby, Pestronk shows me the plans for the final product, and it's pretty fancy.
This looks a lot more homey.
PESTRONK: I agree. Thank you.
RASCOE: (Laughter) How long will it take for you to do this conversion?
PESTRONK: People will move in by the middle of 2027.
RASCOE: OK. That's not that long.
PESTRONK: Well, that's one of the advantages of doing conversions, is that we don't have to dig a hole for a foundation, 'cause there's already one. So that's a pretty significant time advantage versus building out of the ground.
RASCOE: So will people, when they walk into this, they will have no idea, unless they look at the history, that this used to be an office building.
PESTRONK: I hope not.
RASCOE: (Laughter).
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UNIDENTIFIED PERSON: Well, good morning everybody.
RASCOE: Construction broke ground last month. In D.C., there have been 11 office conversions since 2024, creating nearly 2,000 new apartments. D.C. Mayor Muriel Bowser has been pushing these projects. Incentives include a 20-year property tax abatement.
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UNIDENTIFIED PERSON: Because when we started this discussion, you know what everybody said? Conversions are so hard. There's not enough air. There's not enough light. We can't do it. We are proving that narrative wrong that while it may be hard, it is possible.
RASCOE: Today, D.C. has the second-largest number of planned office-to- residential conversions in the country, just behind New York City, but it's happening all over, from Dallas, Texas to Manchester, New Hampshire.
TRACY LOWE: Surprise plot twist, it's not just cities that have this problem. There's too much office space in the United States right now.
RASCOE: Tracy Lowe is a fellow at the Brookings Institution. She co-authored a report on office-to-residential conversions. She says office behavior was changing even before the pandemic.
LOWE: The way that people use offices is something that's been transforming gradually over the last 20 years.
RASCOE: Nowadays, employers need less space per employee. Files live on our computers, not in filing cabinets, so office storage is less essential.
LOWE: The pandemic was basically a collective action opportunity to accelerate those changes that otherwise have unfolded very gradually.
RASCOE: Now, Lowe is clear that office-to-residential conversions aren't going to solve the housing shortage, but they can help alleviate the problem and provide new homes in central, accessible locations.
This looks nice. So I wouldn't say that it doesn't look like an office, but it looks fancy. It looks like a place you want to go to.
Right in the heart of downtown D.C., a couple of blocks from the White House, we visit a new 13-floor apartment building.
OK. Do you know what offices were in this building before?
KOFI MEROE: I don't know all the offices that were in this building before, but the DOJ had a couple of floors at some point, and some important investigations did happen in this building.
RASCOE: Kofi Meroe is a director of development at Foulger Pratt. He oversaw the project, turning the office building into 200 apartments. They bought the building in 2019, and the first residents moved in this past October.
MEROE: This is probably the most complex construction that I've worked on.
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AUTOMATED VOICE: Twelfth floor. Going down.
RASCOE: Apartment 1214. Ooh (laughter). So there's quite the - I guess you don't call it curb appeal, but as soon as you come in, you're like, whoa. I'm nosy 'cause I want to open these cabinets. Let's see. Oh, my goodness. Look at this. And this - the fridge. Look at this fridge.
Meroe says they looked at 30 different office buildings before buying this one. Location was one of the most important factors.
MEROE: So our bet was that this downtown corridor would start to evolve into a less - not less commercial but not dominated completely by commercial and become more of a residential destination.
RASCOE: Foulger Pratt got started some 60 years ago, and they spent decades building millions of square feet of office space. This was the company's first project converting to residential, but Meroe says it won't be the last.
MEROE: I'm really excited about the opportunity conversions, especially in a city like D.C., where there isn't a lot of open land.
RASCOE: So why haven't conversions taken off more quickly? Tracy Lowe with Brookings says some building owners are betting on an old cycle, that office demand will eventually bounce back.
LOWE: There's a concept in the industry called extend and pretend. And in times past, when there's been a glut of supply in office space, it has gradually resolved itself over time with new growth and new demand.
RASCOE: But Lowe believes this downturn isn't like past office slumps. The way people live and work has evolved. She compares it to the decline in manufacturing in the late 20th century.
LOWE: When those kinds of shifts happen in economy and society, we need to change the buildings. We need to change the built environment in order to match contemporary demand.
RASCOE: Just like many of those empty factory floors became trendy lofts, today's empty cubicles are turning into sleek kitchens and bedrooms.
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RASCOE: This story was produced by Eleana Tworek and edited by Jacob Fenston.
(SOUNDBITE OF FELBM'S "FILATELIE") Transcript provided by NPR, Copyright NPR.
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