Converting CRE into residential is easiest (and probably cheapest) done by tearing the whole building down and building it from scratch. Pretty much nothing in commercial is designed to handle needs of residential and you can't just add missing pipes, shafts, stairs, isolation, etc. to an existing building.
Nah, easiest is changing the definition of "residential" from family to individual - the sector that the US lost in the 70s now known as long term hotels.
When you change this definition to
- communal kitchen
- communal bathrooms
- no window access
You solve many issues
- college costs (by bringing back dormitories instead of every college kid having an apartment)
- housing costs for early 20s that don't want to manage a whole apartment (and Uber eats 90% of meals)
- a small degree of homeless that are similar to the category above (especially the temporary homeless)
- baby boomer (now early gen x) "retirement" not quite to assisted living (yes, this group don't always need a private bathroom and kitchenette - when they have central dining halls)
Yep. Commercial -> Residential conversion is far from easy.
I'm active in a multifamily investor group and what I am hearing is that it is damn near impossible to make this work and actually cheaper to just build new multifamily vs convert.
What if you change the narrative from "single family" home (or multi-family dwellings) to "cater to couples and/or singles that can handle needed compromises"
the properties absolutely need to be written down to accommodate the cost of demolition. The businesses who overpaid and the banks that will repossess the buildings are obviously taking a hit and won’t fund this.
