DC hopes to transform old offices into new hotels and restaurants

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D.C. has transformed old office buildings into new apartment complexes, and now, the city鈥檚 rolling out a new effort that hopes to turn them into hotels, shops and restaurants, too.

The plan, which the city鈥檚 calling , 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.

鈥淭here鈥檚 only so many office-to-residential conversions that can be done,鈥� said Nina Albert, the city鈥檚 deputy mayor for planning and economic development. 鈥淭here鈥檚 another opportunity, because we鈥檝e been approached by developers who鈥檝e wanted to do other commercial uses.鈥�

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 鈥渨e want to make sure there鈥檚 enough hotel rooms,鈥� she said.

There could also be 鈥渕ore dynamic entertainment and cultural uses that we鈥檒l see soon,鈥� Albert said.

As for specific locations, the Gallery Place-Chinatown neighborhood is evolving, she said, and Georgetown University just announced plans for . She described that area as the 鈥渉eart of our cultural and entertainment district.鈥�

Many housing conversions are occurring south of Dupont Circle, because it has some offices but is a 鈥渘atural extension of that residential neighborhood that Dupont already is,鈥� Albert said.

West of the White House, meanwhile, 鈥測ou still have really great office stock that鈥檚 more modern, Class A, trophy office stock,鈥� 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鈥檙e not able to compete well for leases and tenants who are 鈥渞eally looking for that upper echelon of amenities and quality of space.鈥�

However, there鈥檚 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.

鈥淲e’re going to take whatever your tax rate is that year and freeze it for up to the next 15 years,鈥� Albert said.

Some properties, she said, can be converted as quickly as 15 months.

鈥淲hat 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.,鈥� 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鈥檚 goal of 鈥渁 more mixed-use neighborhood in Downtown D.C.鈥�

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