{"id":107843,"date":"2026-07-26T08:00:00","date_gmt":"2026-07-26T05:00:00","guid":{"rendered":"https:\/\/amlak.net.sa\/?p=107843"},"modified":"2026-07-26T10:08:43","modified_gmt":"2026-07-26T07:08:43","slug":"%d8%aa%d8%ad%d9%88%d9%8a%d9%84-%d8%a7%d9%84%d9%85%d9%83%d8%a7%d8%aa%d8%a8-%d8%a5%d9%84%d9%89-%d8%b3%d9%83%d9%86-%d8%a7%d9%84%d8%ad%d9%84-%d8%a7%d9%84%d8%b0%d9%8a-%d9%84%d8%a7-%d9%8a%d8%b1%d9%8a%d8%af","status":"publish","type":"post","link":"https:\/\/amlak.net.sa\/en\/107843\/","title":{"rendered":"Converting Offices into Housing: The Solution No One Wants to Talk About!"},"content":{"rendered":"

In the heart of Manhattan, the former headquarters of Pfizer is now being transformed into 1,600 residential apartments, in the largest project of its kind in the history of the United States; and in London, more than 100,000 office space has been converted into homes over the past decade. Globally, the conversion of old office buildings into residential apartments (Office-to-Residential Conversion) is the magic double solution: saving dilapidated office assets and providing residential units in the heart of crowded cities.<\/p>\n\n\n\n

But when we look at the Saudi market, we find a silence regarding this solution. In Riyadh and Jeddah, many old office buildings (of B and C categories in the main commercial streets with low occupancy rates, while the same cities are experiencing a huge demand for housing. Why don\u2019t we talk about this solution? Is it economically beneficial? What are the engineering and regulatory challenges that prevent us from replicating the global experience?
In this investigation, we open the \u201cTransformation\u201d file and read the numbers and challenges, to discover whether this is the future of old office buildings in Saudi Arabia.<\/p>\n\n\n\n

The numbers speak: Why convert now?<\/strong>
To understand the motivations behind this global trend, we must look at the numbers. After the COVID-19 pandemic and the change in work patterns, office vacancy rates globally rose. In contrast, major cities are suffering from a suffocating housing crisis.
In the United States, CBRE estimates that there are 10.3 million square feet of conversions underway or planned in New York alone. In the United Kingdom, converted offices accounted for 86.7 percent of total new homes created through change of use between 2015 and 2023.<\/p>\n\n\n\n


Category (A) Full occupancy<\/strong>
In Saudi Arabia, the picture looks different at first glance; JLL\u2019s second-quarter reports indicate nearly full occupancy rates for prime and A-class offices in Riyadh, with vacancy rates of 0.5% and 3.8%, respectively.<\/p>\n\n\n\n

But the real story lies in the details. What about the old buildings?
In Dammam, the vacancy rate in category (B) offices is about 21.4%. In Riyadh and Jeddah, there are old office buildings in commercial streets (such as Old King Fahd Road and Al Talilah Street) that suffer from the obsolescence of their facilities and their inability to compete with modern skyscrapers such as the King Abdullah Financial Center (KAFD). These buildings are the first choice for conversion.<\/p>\n\n\n\n

The engineering paradox: what makes an office bad makes it an excellent place to live!
Some might think that converting an office into an apartment is just a matter of building some interior walls. The truth is that the engineering challenge is the biggest obstacle, but it also holds an astonishing paradox.
Global architecture firm Gensler evaluated more than 1,300 office buildings in North America to determine their convertibility potential. The result? Only 25% buildings were found to be suitable for conversion.<\/p>\n\n\n\n

But the most important discovery was that the \u201cflaws\u201d that make the office building undesirable today are the same ones that make it an ideal residential project.
The report says: \u201cThe floor-to-ceiling height in old C-class buildings is usually 12 feet. This height is considered very low and cramped for a modern office (after installing central air conditioning and the borrowed ceiling, only 8 feet remain). But once these extensions are removed, you get a residential apartment with a height of 11 feet, which is considered a very luxurious height in the world of housing!\u201d<\/p>\n\n\n\n

The five major engineering challenges:<\/strong>
1- Floor Plate Depth: Offices are designed to be very deep, while apartments need windows and natural light in every room. Very deep buildings leave dark spaces in the middle that are not suitable for living.
2- Plumbing: The offices have centralized bathrooms grouped into one area. Converting them into living space means the need to extend plumbing to each apartment (bathroom and kitchen), which requires intensive drilling of the concrete floors.
3- Windows: Office windows often do not open, and their design does not provide the privacy required for living.
4- Facilities: Modern residential buildings require sports halls, swimming pools, and common areas, which are not available in old offices.
5- Structural structure: The network of columns in the offices may conflict with the optimal division of apartments.<\/p>\n\n\n\n

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    The best buildings for conversion are those built before the mid-1990s, when the floor areas were smaller, the windows were operable, and the ceilings were lower.<\/p>\n\n\n\n

    Economic feasibility: Is it worth the effort?
    <\/strong>The engineering challenge can be solved with money, but are the numbers logical?
    The cost of converting an office building into residential use ranges globally between $80 and $220 per square foot (equivalent to 3,200 to 8,900 Saudi riyals per square meter), depending on the condition of the building and the size of the structural modifications required.
    Despite this high cost, the conversion saves about 30% of the cost of building from scratch, and saves a lot of time (18-24 months for the conversion versus 30 months for new construction).
    More important than the cost of construction is the \u201creturn on investment.\u201d Platinum Capital reports that underperforming office buildings that are successfully converted in prime locations experience a 30% to 60 percent jump in valuation compared to their value as offices. .<\/p>\n\n\n\n

    The role of legislation: the magic solution in London
    <\/strong>If the economic feasibility exists, why don\u2019t we see these projects in abundance? The answer lies in \u201clegislation.\u201d.
    A recent study by the Brookings Institute, which included 18 buildings in six American cities, concluded with a shocking result: In five of the six markets, there is no economically viable transformation project without government intervention or support.
    In contrast, London has managed to create a surge in conversions thanks to a smart legislation known as the Permitted Development Rights (PDR). This legislation allows property owners to change the use of the building from commercial to residential without the need for complex and lengthy planning procedures, which has reduced risks and accelerated the pace of investment.<\/p>\n\n\n\n

    In Saudi Arabia, changing the use of a property from commercial\/office to residential requires approvals from the ministries, municipalities, and civil defense, and the application of the Saudi building code specific to residential buildings on a building originally designed as an office. These regulatory complexities make developers prefer demolishing the building and rebuilding it, or leaving it empty, rather than entering into the maze of conversion.<\/p>\n\n\n\n

    Global experiences: From New York to Calgary
    <\/strong>It is impossible to talk about transformation without reviewing successful experiences around the world.
    In New York, there are currently 44 office conversion projects under construction or planning, totaling 15.2 million square feet, which will produce more than 20,000 residential units (3). The most prominent are the conversion project of the former Pfizer headquarters on 42nd Street into 1,600 apartments, and the 25 Water Street project that will provide 1,300 units.
    In London, the PDR system has produced more than 121,000 converted office units since 2013. In 2024 alone, 3,272 new conversion applications were submitted. (2)
    But in Calgary (Canada)<\/strong>The local government has introduced a direct financial incentive program worth $75 per square foot for each developer who converts an office into housing. The result: 15 projects and an increase of 24% units in downtown residential units.

    The Saudi Opportunity: Foreign Capital and Secondary Regions
    <\/strong>On January 22, 2026, Saudi Arabia took a historic step by opening 170 areas to non-resident foreign investors. Knight Frank estimates that there is $6.3 billion in global capital waiting to enter the Saudi market. .
    This smart capital is not looking to buy old C-class offices with low returns. It is looking for opportunities for \u201crepositioning.\u201d.

    The old office buildings in the secondary commercial streets of Riyadh and Jeddah, which have lost their luster in favor of large-scale projects, represent a golden opportunity. Converting these buildings into modern residential lofts or serviced hotel apartments will provide a unique real estate product that meets the demand of the young generation and expatriates who prefer living in the heart of a city filled with services.
    Furthermore, the conversion is considered an environmentally friendly option, as it preserves the \u201cembodied carbon\u201d in the existing concrete structure rather than demolishing and rebuilding it, which aligns with the sustainability goals of the 2030 Vision.<\/p>\n\n\n\n

    The conclusion: When should we start talking?
    Converting offices into housing is not a magic solution for every empty building<\/strong>. The engineering challenges are real, and the costs are high. But it is a strategic tool that has proven successful worldwide in reviving dead assets and providing housing in the heart of cities.
    To see this solution become a reality in the Saudi market, we need two steps:
    1- Regulatory flexibility:<\/strong> Similar legislation to PDR in Britain facilitates change of use and offers exemptions or incentives to developers who renovate old buildings.
    2- Investment boldness:<\/strong> Real estate developers are ready to get out of the box and use technology (such as valuation algorithms) to identify suitable buildings for conversion.<\/p>\n\n\n\n

      \n
    1. <\/li>\n<\/ol>","protected":false},"excerpt":{"rendered":"

      Reading time: <\/span> 4<\/span> Minutes<\/span><\/span>In the heart of Manhattan, the former headquarters of Pfizer is now being transformed into 1,600 residential apartments, in the largest project of its kind in the history of the United States; and in London, more than 100,000 office space has been converted into homes over the past decade. Globally, the conversion of old office buildings into residential apartments (Office-to-Residential Conversion) is the magic solution\u2026 Read more<\/a><\/p>","protected":false},"author":72,"featured_media":104599,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_seopress_titles_title":"","_seopress_titles_desc":"","_seopress_robots_index":"","_seopress_robots_follow":"","_seopress_robots_imageindex":"","_seopress_robots_snippet":"","_seopress_robots_primary_cat":"","_seopress_robots_breadcrumbs":"","_seopress_robots_freeze_modified_date":"","_seopress_robots_custom_modified_date":"","_seopress_robots_canonical":"","_seopress_social_fb_title":"","_seopress_social_fb_desc":"","_seopress_social_fb_img":"","_seopress_social_fb_img_attachment_id":0,"_seopress_social_fb_img_width":0,"_seopress_social_fb_img_height":0,"_seopress_social_twitter_title":"","_seopress_social_twitter_desc":"","_seopress_social_twitter_img":"","_seopress_social_twitter_img_attachment_id":0,"_seopress_social_twitter_img_width":0,"_seopress_social_twitter_img_height":0,"_seopress_redirections_value":"","_seopress_redirections_enabled":"","_seopress_redirections_enabled_regex":"","_seopress_redirections_logged_status":"","_seopress_redirections_param":"","_seopress_redirections_type":0,"_seopress_analysis_target_kw":"","_seopress_news_disabled":"","_seopress_video_disabled":"","_seopress_video":[],"_seopress_pro_schemas_manual":[],"_seopress_pro_rich_snippets_disable_all":"","_seopress_pro_rich_snippets_disable":[],"_seopress_pro_schemas":[],"amlak_video_sent":"","footnotes":""},"categories":[114],"tags":[],"class_list":["post-107843","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-opinions-and-analyses"],"acf":{"amlak_post_excerpt":"\u0628\u064a\u0646 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