Increase in apartment conversion projects | Immersion in construction

Dive Brief:

• Apartment conversion projects “accelerated at an unprecedented pace” in the US by 2024, according to a new report from RentCafe. Last year, nearly 25,000 the apartments were completed through adaptive reuse50% more than in 2023 and double the amount of those conversions in 2022.
• A record 180,585 apartments in adaptive reuse projects are currently in various stages of development across the country, most of them office space, up 19% from last year, according to RentCafe.
• According to the report, this strong redevelopment activity indicates that major cities are actively transforming underperforming properties, revitalizing neighborhoods and continuing to adapt to the age of remote work.

Diving knowledge:

Hotels were again the first category for adaptive reuse projects in 2024, although office conversions were still popular and accounted for almost a quarter of all new units, the report found. Goleta, Calif.-based RentCafe based the Oct. 24 report on July 2025 apartment data from its sister company Yardi Matrix.

More than 9,100 of the 24,700 apartments completed through adaptive reuse last year came from repurposed hotels, an all-time high and a 46% increase from 2023. That resurgence was driven by tighter profit margins, rising operating costs, uneven demand and a variety of other economic factors, all of which have forced some hotel owners to sell.

However, office conversions were still strong, with 7 in 10 new apartment conversions delivered in 2024 coming from Class A buildings, while offices with less amenities (Class B and C) accounted for just 28% and 1% respectively. Newer, higher-quality buildings offer great upside for conversions, with modern infrastructure and attractive locations for luxury apartment projects, according to RentCafe.

School-to-apartment conversions were the fastest-growing type of reuse project in 2024, up fourfold from 2023. This was driven by declining student enrollments in some urban areas, as well as high costs of renovating historic buildings, according to the report.

Chicago replaced Manhattan as the top metro for apartments created from repurposed buildings with 880 units completed by 2024, though the New York City borough led office conversions and Baltimore had the most hotel conversions.

Second on the list was Denver, which will more than double its conversions starting in 2023. The city has also launched an adaptive reuse pilot program aimed at revitalizing the central business district by supporting office-to-residential conversions.

Buffalo, New York, stands out as the most active city in the industrial reuse category, with plans to deliver 1,250 apartments by converting 10 industrial buildings.

Top cities with the most converted apartments in 2024

Looking ahead, 43% of the next adaptive reuse units expected to come from office space, up 38.5% from 2024. Hotels are in second place, accounting for 20% of all future adaptive reuse projects with 35,800 units expected, while adaptive reuse projects involving industrial buildings account for 17% of conversions

Manhattan has by far the most expected conversions, followed by Los Angeles, Chicago and Washington, DC

“While the adaptive reuse trend has accelerated to an unprecedented rate by 2024, its growth story is far from over,” according to the report.

The best cities for future apartment conversions