Co-Liv meet-up France: Transforming Office Spaces into Shared Residences and Co-living

By Fabrice SIMONDI

Thursday March 11th, I had the honor of moderating the last Co-Liv France Meetup with my dear co-ambassador Kelsea Crawford from Cutwork studio. We have chosen to debate the transformation of offices into shared residences and co-living as a response to the housing crisis in France.

We had as guests: Eric Barbarin, CEO Nexity Patrimoine et Valorisation, Grégory Cardona, Head of Real Estate Development The Babel Community and Jér?me Flot, Founder of SOLTDEV for Solidarity Real Estate. Over 300 people have registered to participate in this webinar.

We tackled three main questions:

?? How is the Covid pandemic and the rise of teleworking increasing office vacancies, and how can unused offices be transformed into new housing opportunities?

?? What are the main obstacles and risks to these transformations?

?? How could new regulations help transform workspaces into living habitats relevant to our contemporary lifestyles?

The reuse of commercial buildings is a sea serpent that we've been questioning since we founded the Co-Liv association in 2015. And it looks like we're finally seeing an alignment of the planets. So I would like to share with you the debate and these post (?) Covid lessons.

We already knew that! New ways of working have challenged the role of offices for years. And the trend is not likely to be reversed with Millennials who will represent 75% of workers in 2025. This generation is seasoned in ATAWADAC2 (Any Time, AnyWhere, Any Data, Any Content, Any Cloud) and most of them want to find meaning and pleasure at work. The office property sector is therefore faced with a lasting change in the expectations of these users. A change accelerated by the Covid pandemic and the two (soon to be three?) Successive confinements that promote the rise of teleworking and mobility.

So do we really still need the physical offices? And given these trends, what will become of the 54.25 million m2 of offices in Ile-de-France?

In view of the strong housing deficit in the region and more broadly in France (10% of French people have difficulty finding housing), reuse seems obvious! However, it is not that simple and many barriers (regulatory, spatial, technical) exist. Can the conversion of offices into housing then be a real opportunity for shared housing?

Meetup poll: 14.9% of webinar attendees never go to the office!

We surveyed our audience in real time by asking “how many days do you spend at the office per week?” The result is quite balanced, as you can see. It should be noted that 45% of participants do not spend more than 2 days at the office.

1 day / week> 14.9%

2 day / week> 14.9%

3 day / week> 17.9%

4 day / week> 16.4%

5 day> 20.9%

Never> 14.9%

(Time spent at the office per week)

With two days of teleworking per week for 41% of companies - a post-Covid scenario adopted by the IEIF (the Institute for Immobilization and Property Savings) for its latest study, the planned area gain would be 27%, i.e. 3.3 million m2 of office space over the next 10 years in Ile-de-France.

And office take-up in Ile de France has already fallen by 44% in the fourth quarter of 2020, according to Immostat (4Q2020). An unprecedented fall which suggests a fall in the prices of office property and therefore greater profitability of conversions into housing. The question of the cost of these transformations of offices into housing is indeed central!

“Cost and spatiality”: Eric Barbarin, CEO Nexity Patrimoine

Nexity Patrimoine specializes in the reuse of tertiary assets and is illustrated through innovative projects, such as the conversion of a garage in the 17th arrondissement of Paris to offer housing for sale in social dismemberment with Perl, or the transformation of 10,000 m2 of offices into co-living in Vitry sur Seine.

Eric Barbarin talks about the cost of these conversions. Indeed, some office transformation projects are more expensive than rebuilding the whole.

According to Sébastien Lorrain, from CBRE France, only 20% of office buildings are convertible in a realistic economy.

Eric Barbarin also points out that the thickness of an office building is generally much greater than that of a dwelling, in order to be able to be used in open space. And he wonders how to use the spaces located in the middle of the building when assigned to housing? In this case, shared housing is a very relevant solution because we can imagine using these spaces for common areas such as cinema rooms, laundromats, sports halls, etc.

“Temporary” changes? : Jér?me Flot, Founder of the SOLTDEV agency, Solidarity Real Estate

SOLTDEV is an agency specializing in setting up solidarity operations. As such, Jér?me Flot worked on the Grands Voisins project (Paris - XIVth century) aiming to transform the former Saint Vincent de Paul hospital into an accommodation center and third places, and on that of the former headquarters of the INPI in Paris.

Jér?me Flot recalls the legal existence of a "temporary permit" that can last more than 10 years to use offices as housing. Despite the constraints of the PLUs, it is therefore already possible to exploit the millions of m2 of vacant offices in housing. A particularly interesting solution for housing populations in difficulty. You should know that with the Covid crisis, more than 60,000 people are living in emergency accommodation.

“Conversion to multi-use”: Grégory Cardona, Head of Real Estate Development The Babel Community

By inaugurating, in November 2017, a stone's throw from the Old Port in Marseille, over 4,000 m2, the first coliving building in France, THE BABEL COMMUNITY has just converted a tertiary real estate complex into multi-use. It is a hybrid building designed for its occupants: young, nomadic, free, yet demanding, sociable and committed to the community.

This building brings together a coworking workspace, catering services, common areas for residents and individual or shared apartments.

The inhabitants easily integrate the building without a residential lease through a simple accommodation contract.

To conclude: The transformation of offices into housing is a complex operation, but possible.

This transformation involves the regulations of the construction and housing code (ERP for example for housing managed in commercial), taxation (VAT in particular), the law of leases (between operators, investors and users), SRU law (social housing) and regulatory town planning (PLU, parking lots, etc.)

It will therefore be necessary to master the destination of the project in order to anticipate the savings.

Shared housing is a very relevant candidate for this type of arrangement, while remaining in a commercial regulatory destination. The main advantages are as follows:

• Some “dark” surfaces can be valued in common
• The requirements for creating a car park are generally lower
• The creation of social housing is not mandatory and other social arrangements are possible (as mentioned with Jér?me Flot)
• The VAT of the cost of the works can be reclaimed, allowing end users to have a better rent.

So I definitely believe that at the dawn of renovating large office buildings, we must also move away from a single-use approach: office or housing, or business, social, non-social, students, seniors ... etc.

We must not only consider the change from offices to housing, but also consider the rise of inclusive mix-use: hybrid places where we live, where we can work and meet different audiences. The neighborhood scale is therefore essential to take into account, especially for large operations. It is this approach that guides our projects at Vitanovae.

Come discuss and debate it with our Co-Liv community during the 3rd edition of Co-Liv Summit on May 5 and 6!?? Get your tickets here 

?? The event's LinkedIn link

?? You can also watch the meet up in replay here

?? You can listen to our Podcast

?? Join us for our next meeting April 8th