The Ralph Bivins Project – Podcast Guest: Dean Strombom

HOUSTON – (Realty News Report) – Architect Dean Strombom joins Ralph Bivins to discuss office-to-residential conversions, corporate campuses and mixed-use projects as Strombom ends a four-decade stint at Gensler. Here’s an excerpt from the latest episode of The Ralph Bivins Project podcast.

RALPH BIVINS: We’re here today with Dean Strombom. He has a tremendous portfolio – 50 million SF of projects developed during his career, which translates to about 50 to 60 skyscrapers. That’s a lot. He has worked on design for about 1,000 projects. He has made a difference in what you see, where you go and where you work. He has designed corporate campuses, commercial office buildings, workplace interiors and mixed- use projects. Dean has just retired after 43 years with Gensler, one of the biggest architectural companies in the world. Congratulations, man.

DEAN STROMBOM – Thank you, Ralph.

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RALPH BIVINS: Looking back to 1980, Dean, what do you feel are the differences between what was built back then, what was designed back then and what is being built and designed now?

DEAN STROMBOM: A lot of things are different; a lot of things are still the same. When I joined Gensler after getting my master’s degree in architecture from the University of Houston in 1980, that year was booming. I’m not sure I’d get the job at Gensler today, but at the time they really needed people to crank out the work, so I was very fortunate to start at Gensler. Then, two or three years later, the bottom fell out – and we’ve had multiple economic cycles in Houston in the years that I was at Gensler. I’ve seen great times and times like now when we seem to be in transition. We’re not quite sure what lies in the future. But the world certainly shifted during the pandemic. Things will probably never be the same as they were before. It has impacted the how, when and why people come to work. It recently impacted capital markets. There is not much of a need right now for office space unless it’s part of an overall mixed-use project or boutique office or a build-to-suit.

But other areas are doing well. I think we are seeing work in life sciences. When I started with Gensler, there was no such thing as life sciences. That’s an up-and-coming thing. There’s still quite a bit of mixed-use work that we are doing. There’s a lot of airport work. There is also quite a bit of work in higher education and health care. We’re not particularly in-depth in the health care field at Gensler. We’d like to do more and we’re trying to get there. This is a field that’s going strong in Houston, particularly with the Texas Medical Center.

RALPH BIVINS: You just mentioned that there is some anxiety out there about the financial situation among owners of office buildings. They have vacancies, but firm who renew their leases are taking less space. And this is just one of the pressures involving the office market.

Converting Office to Residential

DEAN STROMBOM: One of the things we are involved with across North America these days is what to do with these office buildings that don’t really function well as office buildings any longer. We have an overabundance of office space and a shortage of residential space. There is a conversation around the county about the ease of converting office space to residential occupancy. We were contacted by the city of Calgary before the pandemic. Calgary, at the time, like Houston, was faced with having a lot of buildings downtown that were not well occupied. Calgary hired Gensler to do a survey of all the downtown buildings to see which could be converted to residential.

Through this process, we developed a clever little algorithm to evaluate things like building skin, neighborhood configuration and other factors and score the buildings for their potential to be converted to residential. Since then, we have been hired by several other cities to look at their downtown properties. I know the city of Houston is looking at downtown properties to see which make sense for conversions and how do we – or to what extent –do we incentivize building owners to make those conversions. It is not an inexpensive process.

The algorithm contains a lot of information. It’s made up of 20-odd questions that we ask the building owner. Actually, a there’s a lot of information we can get through this processl.Within a few minutes we can spit out a score between zero and 100. Generally, if a building is above 80, it is probably a good option to convert to residential. If it’s below 80 – and the further below 80 it is – conversion is not a good option. We’ve evaluated 1,200 buildings in cities across the country. I think that about 70 percent don’t make sense to convert to residential. The large floor plates are difficult and the modern window walls that are all glass don’t make as much sense. It’s interesting. The older buildings with smaller footprints and punched windows are easier to convert.

RALPH BIVINS: In Calgary, have any buildings in the downtown been converted to residential?

DEAN STROMBOM: Yeah, we did one that I know of that was converted to residential, and it’s worked out really well. The city of Calgary decided to incentivize building owners to the tune of $75 a square foot, which helps a lot. Without that, to convert an office building to residential costs at least $250 a square foot, upwards of $400, depending on a lot of different factors. Incentives are needed by building owners to make that step.

Dean Strombom biography

Dean Strombom, a strategy leader and principal with the Gensler architectural firm, has retired Sept. 1, after 43 years at the firm. With a portfolio of properties consisting of more than 50 million SF, Dean has led the planning and design of corporate campuses, commercial office buildings, workplace interiors and mixed-use developments. He has been the South Central Region’s strategic advisor to the consulting and real estate practice area and a Houston office leader.

During his career, Dean leveraged his unique blend of education in psychology, sociology and architecture to offer strategic real estate and design insight. He is co-author of “The Commercial Real Estate Revolution” and formerly chaired the Advisory Board of the University of Houston Graduate School of Real Estate at Bauer College. He has been actively involved in Houston chapters of professional organizations including NAIOP, ULI, HOLBA, AIA and CoreNet.

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