RentCafe: Adaptive Reuse Projects Increase, With Hotels Popular in 2023

(Image courtesy of RentCafe: Breakout image courtesy of Thirdman/

RentCafe, Santa Barbara, Calif., found adaptive reuse projects grew last year. There were 17.6% more apartments converted from outdated buildings in 2023 compared with 2022.

There were 12,713 new apartments converted in the year. And, there are 151,000 units currently in various stages of conversion.

Office conversions have been a popular idea, but hotels are currently dominating the adaptive reuse space, RentCafe found.

Of the building types converted in 2023, 36% were repurposed hotels, 28% were office buildings, 15% were factories, 9% warehouses and 12% other.

“The adaptive reuse market does show a bifurcation between high-end and low-end markets. This is particularly evident in the commercial real estate sector, where a sizable portion of office vacancies are found in older buildings with reduced functionality and lack of modern amenities,” observed Doug Ressler, Senior Analyst & Manager of Business Intelligence with RentCafe parent Yardi Matrix. “Although these buildings pose challenges for conversion into residential spaces due to factors like building age, size, configuration and location, repurposing them helps alleviate the shortage of rental units at diverse price points, especially in areas where vacant or underused buildings are prevalent.”

Of the 151,000 apartments in different stages of conversion, about 40,000 are currently underway.

Those office-to-apartment conversions may be more popular moving forward, RentCafe noted. There are 58,000 future apartments planned from defunct office spaces.

There are 34,000 repurposed hotel units anticipated, and 18,000 from factory conversions.