Chicago became the top city for apartment conversion projects in 2024, according to the latest research from RentCafe.
In an October Market Insights report, RentCafe said that the number of adaptive reuse projects — converting outdated commercial space, often office properties, into new uses — soared across the United States in 2024.
According to RentCafe, these adaptive reuse projects resulted in a record-setting 25,000 new apartment units last year. And Chicago overtook Manhattan to become the top city for commercial real estate conversion activity.
The number of apartments delivered from adaptive reuse projects in the United States last year was 50% higher than the units delivered the year before and double the number in 2022, RentCafe said.
RentCafe said, too, that a record-breaking 181,000 apartments are now being converted in adaptive reuse projects, with most of these units the result of office space conversions. That figure represents a jump of 19% from last year.
According to RentCafe, about 78,500 multifamily units are now being developed from makeovers of former offices, while an additional 35,800 new apartment units are coming from the redevelopment of former hotels.
While plenty of former office properties are being converted to apartment buildings, it’s actually outdated hotels that are seeing the most conversions to multifamily use. RentCafe said that of the 24,700 apartments completed through adaptive reuse projects in 2024, more than 9,100 came from repurposed hotels. That is an all-time high and is an increase of 46% from 2023.
Revamped office buildings added nearly 5,900 new apartment units across the country in 2024. This means that one in four new converted apartment units last year used to be an office.
Chicago ranked as the city with the most new apartment units from conversions last year, with 880 such units. Denver, Philadelphia, Dallas and Manhattan rounded out the top five.
Minneapolis ranked sixth with 574 new apartments resulting from conversions last year, while Detroit took the 10th space with 518 new units.
