By Alexandra Both
Adaptive reuse projects rose to historic levels by 2024. In the US, nearly 25,000 apartments have been completed from converted buildings, a 50% jump from 2023 and doubling the total by 2022, a 50% increase from 2023. RentCafe.com report shows.
The trend shows no signs of slowing down. There are currently another 181,000 apartments in the pipeline, most from former office buildings, reflecting how developers are reimagining outdated spaces to meet housing demand.
HOTELS dominate, offices follow closely
Hotels were once again at the forefront of adaptive reuse. In 2024, more than 9,100 new apartments came from converted hotels, representing 37% of all reuse projects – an increase of 46% compared to the previous year.
This shift stems from the continued pressure on the hospitality sector: smaller margins, rising costs, slow recovery in the travel industry and looming debt. Many owners opted to sell or repurpose underperforming hotels, especially Class B and C properties, which made up 93% of conversions last year.
Meanwhile, office-to-apartment projects accounted for nearly a quarter of new units. This amounts to approximately 5,900 apartments, an increase of 34% year on year. Interestingly, seven of the ten projects came from Class A office buildings, which are easier to adapt thanks to their modern layout and infrastructure. These premium conversions are often aimed at renters looking for luxury city living.
Other categories also experienced growth. For example, industrial buildings accounted for about 20% of new units, while schools – the fastest growing segment – accounted for almost 8%. About 2,000 apartments came from former educational institutions, four times as many as in 2023. Declining enrollment numbers and the high costs of maintaining old school buildings have made conversions an attractive solution in many urban areas.
CHICAGO TAKES THE CROWN FROM MANHATTAN
For the first time, Chicago topped the list of cities with the most new apartments built through adaptive reuse, surpassing Manhattan. The Windy City delivered 880 apartments in four major projects, including the conversion of a historic Sears store into 206 apartments.
Chicago’s city government has been proactive in promoting adaptive reuse, particularly in the LaSalle Corridor of the Loop, where incentivized redevelopment programs aim to produce a thousand mixed-income apartments, a third of which will be affordable.
Denver came in second with 789 new apartments, more than double the total by 2023. The Adaptive Reuse Pilot Program encourages office-to-residential conversion in the downtown, supported by the upcoming state tax credits starting in 2026.
Philadelphia followed with 761 units, highlighted by The Battery, a landmark 1920s power utility building on the river, transformed into lofts with coworking spaces and a rooftop pool.
In Dallas, three major projects delivered 698 apartments, including the Peridot Residences – a $40 million renovation of the 50-story Santander Tower downtown.
Manhattan, last year’s leader, fell to fifth place despite the completion of 588 apartments, all part of Pearl House, one of New York’s largest office-to-residential conversions to date.
Every city in the top 10 delivered more than 500 units, a significant increase from the previous year when most reached nearly 300.
BALTIMORE LEADS IN HOTEL CONVERSIONS, MANHATTAN STILL ARRANGING OFFICES
In the hospitality sector, Baltimore led the nation in converting two outdated hotels – the Holiday Inn and the Radisson – into 550 apartments, marking the largest hotel transformation of 2024.
Next, two Florida cities showed strong performances. Kissimmee, near Disney World, added 500 apartments as a result of hotel conversions, addressing both excess lodging supply and local housing needs. The city has another 500 units under development, making it the prime market for upcoming hotel-to-apartment projects.
The second is Jacksonville, where hotel transformations created 423 new apartments in 2024, aided by flexible zoning and municipal incentives. One notable project, Elevate at Baymeadows, turned a two-story Day’s Inn into 107 modern rental homes.
Office conversions remained robust in Texas and the Midwest, although Manhattan retained its office conversion crown. The standout project, Pearl House at 160 Water Street, transformed a 1970s tower into 588 apartments with five new floors – a collaboration between Vanbarton Group and Gensler.
Nearby White Plains, New York, delivered 468 apartments by transforming a 1960s AT&T office into modern housing. Dallas followed with two major towers – Peridot Residences (291 units) and The Sinclair (293 units) – that together reshaped the downtown skyline. Houston ranks fourth after repurposing a downtown office tower into Elev8, with 372 apartments, one of the largest office conversions in the country.
The Midwest also saw strong participation, with Cleveland, Detroit, Minneapolis and Cincinnati each delivering between 200 and 367 units from office conversions.
THE PIPELINE: 181,000 UPCOMING APARTMENTS
The bloom is far from over. Nationally, there are now almost 181,000 apartments in various stages of redevelopment – an increase of 19% compared to the 2024 pipeline.
Offices dominate future projects and represent 43% of upcoming conversions, or approximately 78,400 apartments across 430 buildings. Manhattan again leads the way with 9,000 office units planned, signaling a shift toward transforming outdated commercial towers into livable spaces.
Hotels remain the second largest category, with 35,800 apartments – or 20% of all future projects – set to emerge from former accommodations. Manhattan is also poised to take the lead here, with seven new hotel conversions expected to create more than 1,700 apartments.
Industrial spaces make up another 17%, led by Buffalo, New York, which plans to deliver 1,250 apartments through the transformation of 10 warehouses and factories.
At the city level, Manhattan tops the national list for future conversions with 11,000 units, followed by Los Angeles (5,640) and Chicago (5,000). Rounding out the top 10 are Washington, DC; Philadelphia; Denver; Brooklyn, New York; Atlanta; and Dallas, all of which are converting underutilized spaces into new rental opportunities.
The boom in adaptive reuse reflects broader shifts in how cities are responding to post-pandemic realities: vacant offices, struggling hotels and a persistent housing shortage. Developers, investors and local governments are increasingly working together to reimagine these spaces as attractive communities.
For more insights and a detailed methodology, read the full report on RentCafe.com
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