Conversion of Office-to-Apartments More Than Quadrupled in Four Years

Conversion of Office-to-Apartments More Than Quadrupled in Four Years

Christopher B. Leinberger, Co-founder of Places Platform, LLC and Emeritus Professor at the George Washington University School of Business informed us that his Washington D.C. area is the most prominent leader experiencing the extraordinary growth in the conversion of office buildings into living spaces.

As noted in a recent article in Yardi’s RentCafe entitled “From Boardrooms to Bedrooms: A Record 55K Office-to-Apartments Expected in Major Cities”

  • From 2021 to 2024, the number of apartments scheduled for conversion from old office spaces increased from 12,100 to 55,300.
  • Office conversions now represent 38% of the 147,000 apartments in future adaptive reuse projects.
  • The average age of office buildings to be transformed into rentals is 72 years, 20 years younger than those previously converted.
  • The trend is most prominent in Washington, D.C. (5,820 units), followed by New York (5,215 units) and Dallas (3,163 units).

Entering 2024, our cities are riding a wave of change that’s been building up for the last four years. The urban landscape is getting a makeover, shifting from corporate to community. Office buildings, once the epicenters of the 9-to-5 grind, are being transformed into the new homes of urbanites, in a pandemic-driven remote-work new reality.

The Rent Café article lists the Top 15 Metros for Future Office-to-Apartment Conversions Underway in 2024

Key metros like Washington D.C., New York City, Chicago, Dallas, TX, Los Angeles, and Seattle are leading the future trend of urban redevelopment, reflecting a nationwide adoption of adaptive reuse. This movement is not just about adding housing; it’s a shift towards more sustainable and community-focused urban environments, indicative of changing lifestyles and priorities in American cities.

What’s causing this shift?

Behind this shift lies a crucial factor: the $150 billion in office mortgages due by 2024. As residential space demand surges, developers are leaping at the chance to repurpose these aging giants. Currently, office conversions represent a staggering 38% of the 147,000 apartments in future adaptive reuse projects, outpacing any other building type. That’s not just the largest slice of the redevelopment pie—it’s a record high since 2020. Clearly, the buzz of business is giving way to the hum of home life, right where the city’s heartbeat used to be.

We look forward to Chris keeping us updated with the emerging trends regarding  adoption of adaptive reuse.

 

 

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