More office buildings are becoming apartments
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The office, once the place of pleasant water-cooler talk and the gentle whirring of copy machines, is eerily quiet these days. It’s uncertain what will become of all this vacant real estate. One idea: Apartments.
A growing number of developers are transforming these properties into housing. A new report from RentCafe states that the conversion of office buildings to apartments is at an all-time high.
“In the last two years, apartment conversions jumped by 25% compared to two years prior. More precisely, this increasingly popular real estate niche brought a total of 28,000 new rentals in 2020-2021, well above the pre-pandemic years of 2018-2019 when 22,300 apartments were brought to life through adaptive reuse,” RentCafe reports, citing data from Yardi Matrix.
Repurposing these underused buildings is one way to help address America’s housing shortage, as there’s ample office space to convert. In Los Angeles alone, there are 2,300 commercial properties that could be adapted into about 72,000 to 113,000 housing units, according to a Rand Corp. report.
Of course, living in a building is very different from working in one. An office-to-apartment conversion would require a substantial retrofit of a building’s water-heating system. Thankfully, modern commercial tankless units offer significant space and energy savings.