D.C.’s Office to Anything Program: Reimagining Urban Real Estate
January 2025 | Category: News
By Rebecca Urland Monzi
On January 14, 2025, Mayor Muriel Bowser and the Office of the Deputy Mayor for Planning and Economic Development launched the Central Washington Activation Projects Temporary Tax Abatement, commonly known as the “Office to Anything” program. This initiative addresses a critical issue in Washington, D.C.’s commercial real estate market: the oversupply of underutilized office buildings.
This program is pivotal for stakeholders in Washington, D.C. commercial real estate. It has the potential to transform the city’s urban core while creating new opportunities – as well as challenges – for property owners, developers, and tenants.
The Office to Anything Program: An Overview
The Office to Anything program offers a 15-year temporary property tax freeze to incentivize the conversion of vacant or underused office spaces into other property types, such as retail, hospitality, or mixed-use developments. The total of available tax abatements is subject to a cap of $5 million for 2027, $6 million for 2028, and $8 million for 2029, with 4% growth each year after. Notably, availability of the abatements will be aggregated with previous years (i.e., in 2028, only $1,000,000 of new abatements will be available to applicants).
This initiative is part of a broader strategy to combat the economic impact of remote work, which has left many office buildings in the city under-occupied since the pandemic.
To qualify for the competitive program, properties must meet specific eligibility requirements, including:
- Location: The property must be within designated zones of Central Washington, where vacancies are highest.
- Vacancy Threshold: Buildings must demonstrate a sustained level of vacancy, indicating they are unlikely to return to full occupancy as office spaces.
- Redevelopment Plans: Applicants must submit detailed proposals outlining how the property will be converted and its anticipated community impact.
Tax abatements under the program aim to offset the high costs of adaptive reuse, such as meeting modern building code requirements.
The Impact on Washington, D.C.’s Commercial Real Estate Landscape
Addressing Office Vacancies
The pandemic accelerated a shift toward hybrid and remote work models, leaving office landlords grappling with high vacancy rates. In some areas of D.C., office vacancy rates have climbed above 20%, a figure that would have been unthinkable a decade ago. The Office to Anything program provides a much-needed pathway to repurpose these spaces.
From a legal perspective, these conversions present both opportunities and complexities. Developers will need to navigate zoning changes, negotiate new lease structures, and ensure compliance with tax abatement requirements.
Revitalizing Downtown Areas
The program benefits Washington, D.C.’s downtown neighborhoods, which have struggled with decreased foot traffic and economic activity. By creating vibrant, mixed-use spaces, the Office to Anything program will attract new businesses and hopefully revitalize nightlife in an area that has become increasingly reliant on daytime office workers.
Developers considering retail or hospitality conversions will need to weigh market demand carefully. While these sectors are recovering, success will depend on factors like location, accessibility, and alignment with community needs.
Challenges and Considerations
While the Office to Anything program is largely considered a step in the right direction, it is not without challenges, including:
- Financial Feasibility: Despite tax abatements, adaptive reuse projects can be expensive and carry significant risks. Developers must conduct thorough financial analyses to ensure these projects are viable.
- Regulatory Hurdles: Zoning laws and building codes designed for office spaces often differ significantly from those for mixed-use properties. Developers will need to work closely with legal counsel to navigate these regulatory landscapes.
- Community Buy-In: Large-scale conversions can face pushback from local communities, particularly if they are perceived to exacerbate issues like traffic congestion or gentrification. Proactive engagement with stakeholders will be key to ensuring projects move forward smoothly.
Transforming Vacancies into Opportunities
The Office to Anything program has the potential to reimagine the future of commercial real estate in Washington, D.C. While challenges remain, the potential benefits—reduced vacancies and revitalized neighborhoods—are substantial. With careful planning and strategic legal guidance, property owners and developers can seize this opportunity to shape the city’s next chapter.
If you’re considering an “Office to Anything” adaptive reuse project and would like to discuss the program requirements in more detail, or if you have any questions about Washington, D.C. commercial real estate law, please contact Rebecca Urland Monzi.