Cities across the U.S. are shifting from corporate dominance to a focus on community as former office buildings, once synonymous with the 9-to-5 routine, are being repurposed as modern dwellings for urban residents.
The trend has seen rapid growth over the past four years. In 2021, 12,100 apartments were created from former office spaces, according to a report from Yardi Matrix sister company RentCafe. By 2022, that number nearly doubled to 23,100. It reached 45,200 in 2023, and as 2024 begins, the pipeline has reached a record 55,339 — a more than fourfold increase since the trend began.
The $150 billion in office mortgages due by 2024 is part of the reason for the rise in conversions. Office conversions represent 38% of the 147,000 apartments in future adaptive reuse projects, outpacing any other building type.
Metropolitan areas like Washington, D.C., New York City, Chicago and Dallas are leading the trend of repurposing office buildings as residences. But the movement isn't just about adding housing, according to the report. It's a shift toward more sustainable and community-focused urban environments.
Future Office-To-Apartments By Metro Area
| Metro Area | 2024 Office-To-Apartments | Office-To-Apartments YOY % Change | Share of Office-To-Apartments 2024 | Total Future Conversions |
| Washington, D.C. | 5,820 | 88% | 65% | 9,021 |
| New York City | 5,215 | 18% | 45% | 11,485 |
| Dallas | 3,163 | 58% | 83% | 3,833 |
| Chicago | 2,822 | -9% | 55% | 5,140 |
| Los Angeles | 2,442 | 6% | 37% | 6,660 |
| Cleveland, Ohio | 2,012 | -10% | 63% | 3,210 |
| Cincinnati | 1,563 | -6% | 81% | 1,919 |
| Kansas City, Mo. | 1,510 | 84% | 50% | 3,033 |
| Atlanta | 1,422 | 40% | 52% | 2,713 |
| Phoenix | 1,377 | 114% | 63% | 2,172 |
| Minneapolis | 1,334 | 13% | 59% | 2,244 |
| Detroit | 1,070 | 40% | 27% | 3,905 |
| Columbus, Ohio | 1,006 | 35% | 58% | 1,740 |
| Philadelphia | 975 | 136% | 19% | 5,092 |
| Seattle | 973 | 5% | 46% | 2,138 |
| Birmingham, Ala. | 942 | 41% | 50% | 1,875 |
| Hartford, Conn. | 930 | 61% | 37% | 2,528 |
| Milwaukee | 911 | -8% | 41% | 2,217 |
| Denver | 902 | 0% | 36% | 2,528 |
| Charlotte, N.C. | 864 | 8% | 45% | 1,925 |
The data shows office-to-apartments currently under conversion, planned or prospective.
Newer office spaces are more likely to be chosen for makeovers. They are an average of 72 years old — 20 years newer than the ones already converted — likely because newer buildings are less expensive to renovate and are more likely to meet modern standards.
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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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