Property: buy office REITs for housing exposure?

QUESTION:  The Economist wrote an interesting article about offices being converted to resident…is there a real estate investment trust (“REIT”) opportunity?

ANSWER: No.

There is no doubt that a small proportion of office buildings would make terrific homes, but a REIT is likely to have far more office buildings that would be poor conversions.  The economics of buying an office building and knocking it down to build residential may work on certain streets in the world (e.g. Central Park South or something that is directly opposite Sydney Harbour), but generally it doesn’t.