RentCafe: Record Office-to-Apartment Unit Conversions Projected

(Image courtesy of RentCafe; Breakout image courtesy of SevenStorm JUHASZIMRUS)

RentCafe, Santa Barbara, Calif., found a record 70,700 apartments are set to be converted from office space.

That’s a significant increase from 23,100 in 2022.

However, these conversions do take a fair amount of time. There were 55,339 office-to-apartment conversions in some phase of development in January 2024, but only 3,709 were completed by year-end. RentCafe points to conversion feasibility, construction costs and local incentives as factors.

Office-to-apartment conversions are currently the most popular adaptive reuse project, making up 42% of the 168,500 future conversion projects. That’s up from 38% last year. The number of office-to-apartment conversions has been growing steadily the last few years amid continued remote and hybrid work.

Hotels are 22% of those projects, factories are 11%, warehouses are 6% and “other” are 19%.

In general, adaptive reuse projects of newer buildings–those built in the 1990s, 2000s and 2010s–are on the rise. Those projects have increased from 1.27% of the total to an anticipated 7% of the total.

The New York metro area has the largest number of office units planned or under conversion into apartments, with 8,310. Washington, D.C., comes in second with 6,533 future apartments, and Los Angeles is No. 3 at 4,388.