About Urban Design Group
Urban Design Group provides services for all phases of civil engineering design including surveying, planning, preparation of construction plans, and construction administration.
Latest Urban Design Group News
Apr 4, 2023
Baltimore has been one of the most active U.S. cities in converting office buildings into apartments, and experts predict this trend will endure despite the economic headwinds hindering financing. The confluence of strong demand for rental housing in Baltimore with sagging need for office space should sustain the pace — nearly 400 units were created from conversions in a recent 12-month period — of adapting outdated offices into multifamily assets, experts said. "In our city, in particular, we have a shortage of quality housing," Urban Design Group principal Patrick Lundberg said. "And it's directly tied, in part, to the challenge … of maintaining and growing our population. So it's not the only answer, obviously. But I think providing more quality housing and more mixed-use urban environments is a good, and healthy, thing for a city and really any downtown." Soto Architects and Urban Design worked on the office to residential conversion at 22 Light St. While a substantial number of office-to-residential conversions were completed in Baltimore during the last decade or so, industry experts said there's still enough demand for rental units and rehab opportunities to support more transformations. Soto Architect and Urban Design principal Fernando Bonilla-Verdesoto estimated that up to 25% of the city's Class-B and Class-C office stock is suited to residential conversion. "We think that Baltimore will probably be taking over the District [in apartment conversions] in a few years just because it's going to be so expensive in D.C.," Bonilla-Verdesoto said. "And then I really would like to see the office buildings with the charm and the character that they have in Baltimore being converted to apartments." From a developer's standpoint, Chasen Cos. Chief Operating Officer Drew Peace said there is plenty of space left in the market for additional conversions. Last April, Chasen Cos. purchased the historic 1 Calvert St. building for $11.1M. The company expects to deliver 173 residential units in the 15-story tower by next year. "We do see office tenants moving to Harbor Point [and] Harbor East, down to the Baltimore Peninsula, and the older office buildings do provide new opportunities for conversions to residential. And I think it's great for Baltimore," Peace said. "You see many other developers that are doing the same thing ... and see the potential of downtown Baltimore, and I do feel it just provides those developers, and us, an opportunity to bring life back to the CBD." A RentCafé report released in late 2022 ranked Baltimore at No. 8 on its list of 10 cities with the most apartment units created from office-to-residential conversions. Those researchers found that between 2020 and 2021, developers delivered 395 units in Baltimore from converted offices. That's more than some larger cities, such as Dallas, but far behind leader D.C.'s 1,147 units created. However, it is unclear how much runway remains for conversions in Baltimore, and the number of projects may already be slowing. Baltimore failed to rank among RentCafé’s list of cities with the most pending conversions. That list consists of 20 cities, including Buffalo, New York, Cleveland and St. Louis. Marcus & Millichap's 2023 Baltimore multifamily investment forecast found the market remains in "healthy shape." However, researchers also discovered reasons for concern. Analysts anticipate the number of new apartments delivered in Baltimore in 2023 to hit a three-year high. As a result, vacancies are expected to rise from 4.7% to 5.2% by the end of the year, according to Marcus & Millichap. Rent growth is also projected to fall year-over-year from roughly 5% last year to 2.4% in 2023. Commercial real estate services firm Berkadia issued a report last week also raising concerns about the health of the multifamily sector. The study found multifamily rental rates fell in every region of the country as rent concessions increased. Additionally, renewal conversions dropped nationally from 57.8% in the third quarter of 2021, an all-time high, to 52.6% at the end of 2022. Developers are also navigating economic factors, such as rising interest rates and recent turmoil in the banking industry, that are increasing the cost of financing projects. Urban Design Group is working on the design converting the historic Fidelity and Deposit Building into 220 apartments. Yet, local experts said interest in expanding the city's multifamily market persists, and they said curiosity regarding conversion projects remains robust. "I do feel that the environment is definitely harder now," Chasen Cos.' Peace said. "But it's not going to slow us down with what we have going on. We'll see when we're finished, we have a number of major projects going on in Baltimore right now between Harbor East and 1 Calvert Plaza. But you know, we can't predict what's going to happen in the future." Urban Design Group's Lundberg said partial conversions of outdated properties represent one particular area with room to grow. That approach provides flexibility allowing a rehab to "move the needle" in a way that better suits a property owner, he said. "So, if you have an office tower or hotel tower that is largely completely up to code and operating OK — it just has vacancy issues — you can convert only a certain amount of those floors to residential or a different use, so building owners and developers can kind of look at these things on a floor-by-floor basis," Lundberg said. However, turning unwanted office space into apartments is more challenging than ripping out cubicles and replacing them with residential units. Only specific office properties lend themselves to that reuse. Bonilla-Verdesoto, whose firm designed the conversion of 22 Light St. in Baltimore, said several characteristics must be present for an office-to-residential conversion to work. A building's construction type tops that list, Bonilla-Verdesoto said. Buildings featuring steel beams, columns and corrugated metal decks make the best conversion candidates because they're solid enough to handle the various penetrations required to install bathrooms and kitchens. "[They're] very easy to work with," he said. "We've done these projects in the past. Contractors love it because they don't have to deal with, 'is there rebarring in there?' and that kind of stuff." Ceiling heights represent another primary consideration in converting office buildings. A building suited to an overhaul into residential space must include ceilings at least 10 feet high. That height is needed, Bonilla-Verdesoto said, to accommodate beams below the ceiling and additional duct and pipework for apartments. The building's footprint also should be at most 90 feet in depth. Most structures designed for residential uses feature footprints 60 feet deep. Architects can find creative uses for properties with an additional 30 feet of depth, but renovations get dicey if a building crosses the 90-foot threshold. "If you go beyond that, it's just providing additional square footage that is not being used," Boniila-Verdesoto said. Most of the buildings best suited for conversions, Lundberg said, were built before World War II. Prewar office buildings, he said, were built with smaller office modules more conducive to residential conversions. More modern office buildings built in the postwar era, he said, generally have deeper floor plans designed for open office cubicle farms, which are less conducive to high-quality design units. That's because deeper units mean limited exterior access for light, air and egress. "What history has shown is that there's a big difference in the more midcentury modern postwar office buildings, as opposed to the more historic prewar office buildings," Lundberg said. However, more modern buildings do have some advantages, he said. Modern high-rise construction techniques met higher fire resistance ratings. That's due in large part to greater separation between floors. "A more modern building that has been ... office for a while, it's already going to have a sprinkler system, it's already going to have a fire alarm. So, you can likely just reuse those existing systems, and the fire marshal is going to be OK with it," he said. Additional factors that could make or break a project include parking requirements, surrounding amenities and mass transit access. However, issues such as lacking amenities can be remedied depending on the developer's vision. "If you're lacking some neighborhood amenities, you can add them, like adding some retail components or the amenities you provide inside the building. Those are some things that if the neighborhood is lacking, you [can] provide them," Bonilla-Verdesoto said. Right now, Peace said, many of the amenities needed to make office-to-residential conversions successful in Baltimore are on the way. The renovation of Penn Station in Mount Vernon, the planned overhaul of Harborplace and upgrades at CFG Bank Arena provide momentum for rental housing in Baltimore, he said. "There's a lot of excitement now with with new developments and new amenities around downtown Baltimore," he said. "And in addition to those is the opportunity for developers to acquire a property in the Central Business District that is almost completely vacant." Contact Adam Bednar at firstname.lastname@example.org
Urban Design Group Frequently Asked Questions (FAQ)
When was Urban Design Group founded?
Urban Design Group was founded in 1981.
Where is Urban Design Group's headquarters?
Urban Design Group's headquarters is located at 3660 Stoneridge Road, Austin.
What is Urban Design Group's latest funding round?
Urban Design Group's latest funding round is Acquired.
Who are the investors of Urban Design Group?
Investors of Urban Design Group include Dunaway.