The global real estate firm Hines will be the latest to undertake an office-to-residential building conversion, the first such project in the company’s history. Hines acquired the 24-story South Temple Tower in Salt Lake City, and the Houston-based firm plans to transform it into a 255-unit luxury apartment complex. Construction will begin in early 2023.
Hines said it did an extensive analysis of the office tower before acquiring the building to ensure it was suitable for residential conversion, including evaluating the office’s walkability, natural light, and the shape of the building. The South Temple Tower functioned well as an office building for decades, but its smaller floor plates and fewer parking options made it less attractive to occupiers in recent years. Hines said there are only a handful of tenants using the building as office space today, but they’re now aware of the real estate firm’s plans.
Dusty Harris, the senior managing director of Hines, said the firm may use this office-to-residential building template in the future, but he stressed these types of conversions will likely be handled on a case-by-case basis. “There is not a one-size-fits-all for an office building to residential conversion,” Harris said.
More real estate firms are looking at office-to-residential conversions, aiming to cash in on a hot multifamily market with a housing shortage. But Harris of Hines hit the nail on the head: the conversions are more complicated than they may seem, and not every aging office tower is suitable to become an apartment building.