The trend of office-to-residential conversion has gained traction among foreign investors in the U.S. commercial real estate market, according to AFIRE’s latest International Investor Survey Report. The report reveals that 90% of respondents plan to convert existing office properties into residential units within the next five years.
Moreover, survey participants anticipate that over one-third of their U.S. portfolio’s office assets will require upgrades to meet future occupancy demands for improved health and sustainability amenities as well as modern work style preferences. Investors are also exploring various other options for repurposing offices, such as converting them into industrial storage or data centers (72%), hospitality or leisure spaces (69%), and even vertical farming facilities (33%).
Gunnar Branson, CEO of AFIRE stated that this survey reflects institutional investor sentiment towards the U.S. market in late 2023 and highlights their long-term approach towards seizing opportunities amidst uncertainties. These investors recognize the need to realign their portfolios with changing asset class demands, particularly an increasing demand for residential properties in major cities across the country.
This article was originally published on Connect CRE.
