According to the RE/MAX 2023 Commercial Real Estate Report, some brokers consider commercial to residential conversions as a key strategy in revitalizing the downtown core of key markets from coast to coast. However, others argue that it isn’t a practical solution from an engineering or financial perspective. Meanwhile, socio-economic problems colliding with business centers may have devastating consequences down the road if action isn’t taken now.
RE/MAX examined 12 commercial real estate markets from coast to coast and found that given the affordability crisis, population growth, inventory challenges and density/intensification plans amid a shortage of urban development land, the potential that conversions present is significant. A recent Altus Group report suggests that the current excess of office space could take more than two decades to absorb and may still not be fully absorbed.
As cities like Toronto continue to grow, the demand for housing also increases. However, the availability of land for new construction may be limited. One solution to this problem is to convert underutilized commercial properties into residential spaces. This approach can not only provide more affordable housing options but also revitalize downtown areas that may otherwise be neglected.
Benefits of Converting Commercial Real Estate to Residential
Converting commercial properties into residential spaces can provide several benefits for cities like Toronto. Firstly, it can help to address the housing shortage. Downtown areas may have many commercial properties that are vacant or underutilized. By converting them to residential spaces, new housing can be created without taking up new land. This approach can also help to increase the density of downtown areas, making them more vibrant and lively.
Secondly, this approach can improve the overall look and feel of downtown areas. Many commercial properties may look outdated or unappealing. Converting them to residential spaces can create new, modern-looking buildings that can attract more people to the area. This, in turn, can lead to more investment in the area, creating new jobs and businesses.
Thirdly, converting commercial properties to residential spaces can be an environmentally-friendly approach to urban development. Salvaging existing buildings and the embodied carbon that goes with them can prove essential in efforts to slow global warming.
Conclusion
Converting underutilized commercial properties into residential spaces can provide a solution to the housing shortage while also revitalizing downtown areas. Cities like Toronto can benefit from this approach by creating more affordable housing options, improving the look and feel of downtown areas, and promoting environmentally-friendly urban development. With successful examples already in place, more conversions like these could be the way forward for the future of urban development.
For more information, contact Jalal Alaee – Toronto Real Estate Agent
