Real Estate

3L Real Estate Plans $30M Office-to-Residential Conversion in Fort Worth

3L Real Estate to convert 330,000 sq ft Fort Worth building into 300+ residential units for $30 million.

By Tal Alexander

6/11, 16:04 EDT
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Key Takeaway

  • 3L Real Estate plans a $30 million office-to-residential conversion in downtown Fort Worth, creating over 300 apartments at 115 West Seventh Street.
  • The project is set to begin in August and will take just over a year, costing less than $100,000 per unit.
  • Despite Fort Worth's strong office occupancy rate of 90%, the trend of converting offices to residences is gaining traction due to remote work and housing demand.

Fort Worth's Office-to-Residential Transformation

A Chicago-based developer, 3L Real Estate, is set to embark on a significant adaptive reuse project in downtown Fort Worth. The firm plans to convert the 330,000-square-foot building at 115 West Seventh Street, previously occupied by Fort Worth National Bank and Oncor Electric, into over 300 residential units. This ambitious project, estimated to cost $30 million, is expected to commence in August and take just over a year to complete. The ground-floor retail space will remain intact, preserving the building's commercial footprint while addressing the growing demand for urban housing.

The Economics of Conversion

The estimated cost of the conversion, less than $100,000 per unit, highlights the economic feasibility of such projects in the current market. Office-to-residential conversions have gained traction as the office sector grapples with high vacancy rates driven by remote work trends. In contrast to Fort Worth's relatively high office occupancy rate of 90 percent, cities like Dallas, with a 26 percent vacancy rate, have seen a surge in similar projects. Dallas is expected to add over 3,000 apartments through office conversions, ranking third nationally. This trend underscores the potential for adaptive reuse to revitalize underutilized office spaces and meet urban housing needs.

Fort Worth's Unique Market Dynamics

Despite the relative infrequency of office-to-residential conversions in Fort Worth, the city is not entirely devoid of such projects. Icon Lodging's $33 million conversion of the former XTO Energy Building into a Residence Inn and other projects like the Sandman Signature Hotel and The Sinclair demonstrate a growing interest in repurposing outdated office properties. 3L Real Estate's project is part of a broader trend of adaptive reuse, which the firm is also pursuing in other cities, including Dallas and Milwaukee. These projects reflect a strategic approach to urban development, leveraging existing structures to create modern residential spaces.

Broader Implications for Urban Development

The shift towards office-to-residential conversions has broader implications for urban development. As cities grapple with the dual challenges of high office vacancies and housing shortages, adaptive reuse offers a viable solution. This trend not only revitalizes underutilized buildings but also contributes to the vibrancy of urban cores. The success of such projects in Fort Worth could pave the way for more conversions, fostering a more dynamic and resilient urban landscape. Additionally, the preservation of ground-floor retail spaces ensures that these developments continue to support local businesses and maintain the commercial vitality of downtown areas.