Commercial building to apartment conversions rose 17 percent last year: report
Story at a glance The number of vacant commercial buildings transformed into apartments jumped by more than 17 percent last year, according to a report from RentCafe. Since 2010, more old and unused factories, warehouses, hotels and office buildings are being adapted into apartments as the need for housing grows in the United States....
Story at a glance
- Adaptive reuse projects, like turning old hotels and empty offices into apartments, are on the rise.
- In 2023, 17.6% more apartments were converted from outdated buildings compared to the year before, according to a report from RentCafe.
- Manhattan is home to the largest number of converted apartments in the country.
The number of vacant commercial buildings transformed into apartments jumped by more than 17 percent last year, according to a report from RentCafe.
Since 2010, more old and unused factories, warehouses, hotels and office buildings are being adapted into apartments as the need for housing grows in the United States.
The trend became more popular in 2020, especially for unused office space, as the COVID-19 pandemic forced Americans into their homes and out of physical offices.
Conversions slowed during the following two years but then picked up to almost pre-pandemic and early pandemic levels last year amid a growing demand for housing and a short supply of homes.
Last year, vacant commercial buildings were converted into 12,713 new apartments, a 17.6 percent increase from the year before, according to the report.
And the trend isn’t going away any time soon.
There are about 151,000 rental apartments currently in various stages of conversion and 58,000 of those apartments are being repurposed from former office space, according to RentCafe, which analyzed Yardi Matrix data for the report.
Last year was also the first time in 14 years that vacant hotels overtook offices in apartment conversions.
Hotels made up 36 percent of the reused buildings for new apartments while vacant office space accounted for 28 percent, the report shows.
Factories and warehouses made up 15 and 9 percent, respectively, of the buildings converted into apartments last year.
While cities across the country are exploring how to convert commercial space into housing, some are more aggressively pursuing conversion projects than others.
Manhattan, which RentCafe chose to designate as its own city, had the most converted apartments in 2023, according to the report.
More than 730 new apartments were created in the New York City borough last year, all from repurposed hotels.
The borough is now home to 5.8 percent of all converted apartments in the country and created nearly four times as many apartments through adaptive reuse last year than in 2022.
Richmond, Va., is home to the second-largest number of converted apartments with the city with 662 new apartments created through adaptive use last year—almost three times the number of units converted in 2022.
Here are the 10 cities with most housing created through adaptive reuse:
- Manhattan, New York—733
- Richmond, Va—622
- Alameda, Calif—372
- Charlotte, N.C.--351
- Cincinnati, Ohio—342
- Lawrence, Mass—338
- Albuquerque, N.M.--300
- Denver, Colo.--300
- Peachtree Corners, Ga—295
- Cleveland, Ohio—282