More than 55,000 office-to-apartment units are expected to be created in 2024. This is up 10,000 units from 2023, according to new research from RentCafe. And while the level is a record, the margin of growth year-over-year is shrinking. There were 12,100 such units in 2021; 23,100 units in 2022; 45,200 units in 2023; and 55,300 units are expected this year.
The average age of office buildings being converted is also changing. It's now 72 years, which is 20 years younger than before. Offices are now 38% of the share of future adaptive reuse projects. Hotels were second at 24%, while the other category was at 20% (think schools and shopping malls). Factories and health care were also viable options for conversions.
Washington, D.C., has the most office-to-apartment conversions expected in 2024, followed by New York, Dallas, Chicago and Los Angeles. Despite being one of the top lagging metros for year-over-year office-to-apartment conversions, Cincinnati was second behind Dallas in the share of 2024 office-to-apartments conversions.