Richard Rubin, managing partner of Endeavor Group Real Estate (EGRE) and a Los Angeles resident, is calling for government officials at all levels and developers to prioritize office-to-residential conversions in the wake of the devastating wildfires to provide much-needed housing.
“The biggest need is housing. It was a crisis before the fires, and now it’s a pandemic as far as I’m concerned,” he says, adding that housing is needed for residents of all socioeconomic backgrounds and the crisis will likely only get worse with the upcoming Olympics and World Cup.
More than 16,000 structures, many of which were residences, were destroyed by the January wildfires, and thousands of residents have been displaced.
Rubin has been active in converting empty office spaces, malls, and hotels into housing, starting in his native South Africa. He came to the United States for a student housing conference in Austin, Texas, and started to look at the need for workforce housing as well as affordable housing without the use of subsidies. It took him two-and-a-half years, and his firm began converting hotels into multifamily housing in 2018. He has helped to convert just under 1,500 units, recently acquiring assets in Austin; Birmingham, Alabama; and Dallas that were primarily hospitality conversions.
“Currently, there are empty office buildings all over Southern California that could be converted into housing,” he says. “Rents also are spiking to the north and south of LA. We have millions of square feet of empty space. If the developers, landlords, housing organizations, and government could all come together to work to convert this empty space, we could alleviate what is turning into the greatest housing shortage in recorded history, provide affordable housing, and make sure there is no price gouging in the wake of this disaster.”
Rubin says he did a quick check in mid-February on LoopNet for space available for potential adaptive reuse from Orange County to Oxnard and as far east as Ventura— searching for a minimum size of 35,000 square feet and no maximum size. He found over 500 assets—from commercial and medical office space to retail—that were the right sizes to convert to housing.
“I think that adaptive reuse should always be a consideration from environmental, speed, and price perspectives,” he says. “I think developers should look at the opportunity because there are so many properties that can be converted.” However, he notes these projects can be hindered by bureaucracy and red tape as well as parking and density requirements.
“I think it could be a very opportune time. I would like to think that the politicians and city officials realize the enormity of what has occurred, and any form of expedient solutions should be entertained,” Rubin adds.
