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D.C. has transformed old office buildings into new apartment complexes, and now, the city’s rolling out a new effort that hopes to turn them into hotels, shops and restaurants, too.
The plan, which the city’s calling the “Office to Anything” program, offers an incentive to transform offices into something new. Buildings in Downtown D.C., parts of the NoMa neighborhood and Southwest will be eligible, according to a news release.
“There’s only so many office-to-residential conversions that can be done,” said Nina Albert, the city’s deputy mayor for planning and economic development. “There’s another opportunity, because we’ve been approached by developers who’ve wanted to do other commercial uses.”
Some of that interest is in building hotels, entertainment spaces and more modern offices, Albert said. D.C. hosted a record number of visitors last year, and “we want to make sure there’s enough hotel rooms,” she said.
There could also be “more dynamic entertainment and cultural uses that we’ll see soon,” Albert said.
As for specific locations, the Gallery Place-Chinatown neighborhood is evolving, she said, and Georgetown University just announced plans for its Capitol Campus there. She described that area as the “heart of our cultural and entertainment district.”
Many housing conversions are occurring south of Dupont Circle, because it has some offices but is a “natural extension of that residential neighborhood that Dupont already is,” Albert said.
West of the White House, meanwhile, “you still have really great office stock that’s more modern, Class A, trophy office stock,” she said.
The office spaces being targeted as part of the new program are those that are considered Class B or C, which are older buildings or those that have lower floor-to-ceiling heights. Because of that, Albert said, they’re not able to compete well for leases and tenants who are “really looking for that upper echelon of amenities and quality of space.”
However, there’s been a drop in demand for office spaces, Albert said, which the pandemic accelerated. To incentivize the conversions, she said the city is offering a 15-year temporary property tax freeze.
“We’re going to take whatever your tax rate is that year and freeze it for up to the next 15 years,” Albert said.
Some properties, she said, can be converted as quickly as 15 months.
“What takes a lot longer is when you look at Downtown D.C. writ large, it will take us the next 10 years minimum to incentivize conversions, and where the market then has some sense of what the future is, and we get that next wave of investment in Downtown D.C.,” Albert said.
D.C. leads the nation in office-to-residential conversions, according to a news release, and Albert said the new program should help with the city’s goal of “a more mixed-use neighborhood in Downtown D.C.”