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D.C.’s First Office Conversion Offers Glimpse Into City’s Future Plans

Defining the future of real estate

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Franco Faraudo & Nicholas Pipitone
August 02, 2024

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Propmodo Daily

By Nick Pipitone · August 2, 2024

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Washington, D.C. officials and developers recently unveiled the city’s first office-to-residential conversion. While the new housing is not affordable, it’s a step in the right direction. About 11 other office-to-housing conversions are in the pipeline in D.C.

Now let’s dig in!

D.C.’s First Office Conversion Offers Glimpse Into City’s Future Plans

Office-to-residential conversions are starting to come to fruition, and few cities are working as hard on the projects as Washington, D.C. City officials and the building owners recently unveiled the first conversion project in downtown D.C., called Elle.

Elle, D.C.'s first office-to-residential conversion, offers luxury apartments, signaling downtown revitalization. (Image: PGN Architects)

The conversion is a win for the city in its plans to revitalize downtown, but the apartments aren’t exactly affordable. Prices start at $2,885 for a 574-square-foot studio and go up to $6,088 for a one-bedroom, one-den apartment with two bathrooms. While the prices are high, they aren’t unusual for the D.C. area, especially given the new building’s prime location.

D.C.’s ‘Office to Anything Program’ supports transforming office space into new commercial, entertainment, or retail spaces by temporarily freezing property taxes for 15 years on new projects. The value of the total tax abatements is subject to a cap, with $5 million for 2027, $6 million for 2028, $8 million for 2029, and four percent growth each following year.

Washington, D.C., is aggressively leading the charge in office conversions, along with cities like Boston, Seattle, and Chicago. In addition to The Elle, 11 other conversion projects are in the D.C. development pipeline that will deliver about 2,300 housing units to the city’s downtown.

Several other U.S. cities have similar incentive programs to encourage office conversions, so we will likely see more ribbon cuttings in the months ahead. D.C.’s first office conversion may not be an affordable one, but it’s a step in the right direction and a glimpse into the future of the city’s downtown revitalization.

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