What to Know Before Pursuing a Change of Use

The pandemic disrupted real estate demand, creating ample opportunity for change-of-use redevelopment projects. Now, office spaces are becoming lab space to accommodate life science demand, extended-stay hotels are a starting point for apartment communities and big box retail can be transformed into warehouse and distribution facilities.

While demand has been redistributed, achieving a change of use isn’t always easy. David Reina, a partner in Morris, Manning & Martin LLP’s hospitality practice, who has seen several hotel-to-multifamily conversions, says that zoning is the top consideration for investors pursuing these deals. “When contemplating a change in use, the first consideration for a buyer is whether it will require a re-zoning or some similar approval from a governmental agency,” Reina tells GlobeSt.com. “In a number of urban jurisdictions, existing zoning may allow for hotel or multifamily use, with the change from one to the other requiring no approval or only an abbreviated or of-right application process—that is ideal.”