Motley Fool Money Investing Opportunities in Transforming Office Space
Jun 18, 2022
Matt Argersinger, head of The Motley Fool's Real Estate Investing Services, sheds light on the commercial real estate landscape. He discusses the potential for transforming underused office spaces into multifamily housing and data centers, addressing the complexities and emerging trends. Rising interest rates and inflation pose challenges, yet specific REITs like Alexandria Real Estate Equities show promise for investors. The conversation highlights the evolving needs in real estate, particularly in areas like Las Vegas, opening doors for innovative investment opportunities.
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Office Conversion Challenges
- Matt Argersinger invested in an Atlanta office conversion project in 2019.
- COVID-19 impacted demand, but the project was eventually sold to residential developers, minimizing losses.
Office-to-Residential Conversion Complexities
- Converting offices to residential is complex, requiring specific building characteristics.
- Many office buildings lack suitable floor plans, utilities, and parking for efficient conversion.
Limited Public Market Plays
- Public market investment plays for office conversions are limited.
- Most conversions are private projects by smaller developers, not large REITs.