From Offices to Live/Work Units

By: Adrienne Schmitz

A developer has begun creating value from obsolete office buildings by converting them into units that tenants can use as offices or apartments — or as live/work suites.

DEVELOPER Conrad Cafritz saw the local inventory of obsolete office space in the Washington, D.C., area growing and recognized an opportunity. His firm, Cafritz Interests LLC, created e-lofts, a new concept for managing commercial real estate and a way to create value from these obsolete, often vacant buildings. E-lofts is a division of Novus Residences, a subsidiary of Cafritz Interests.

Unlike most buildings that are designated for either residents or workers, the e-lofts concept offers finished units that can be used however the tenant likes: for living space, for offices or for both.  Tenants can even change the use after they rent a unit. The idea is to maintain flexibility to address an ever-changing market.

E-lofts’ first project is the conversion of a 12-story building located in Alexandria, Virginia, that had been vacant for about eight years. Until 2007, it held offices for the U.S. Department of the Army. Once vacated, the building was sold for $156 million. In 2015, e-lofts paid $20 million for the property.

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