Across the US, a significant shift is underway as developers increasingly convert underused office spaces into residential apartments. This trend, gaining momentum over the past year, is transforming urban office districts into vibrant mixed-use communities. According to CBRE, nearly 70 million square feet of office space was undergoing conversion to other uses in Q1 of 2024, marking a significant increase from the previous year. Among these projects, more than 60% involve converting office buildings into multifamily residences, signaling a broader movement toward addressing the nation’s housing shortage.
The map above highlights the location of these conversions, with a concentration in cities like Cleveland, Houston, and Philadelphia – markets where aging office buildings and high vacancy rates have made conversions particularly appealing. In Cleveland, alone, 11% of the total office inventory is undergoing conversion, drastically altering the city’s landscape. These projects are not without challenges: high conversion costs and interest rates pose substantial hurdles. However, with increasing government support in the form of subsidies and relaxed zoning laws, the trend is poised to continue, offering a promising path forward for revitalizing America’s downtowns.