It’s no secret that the office sector continues to struggle, with Class-B and -C buildings especially battling soaring vacancy rates. Many of these buildings, though, might become multifamily housing.
A January report from RentCafe says that the pipeline of apartment units scheduled to be crafted from old office spaces stood at a record 55,300 as 2024 began.
Developers aren’t targeting any office building, though. They’re going after older ones, with the average age of office buildings scheduled to be transformed into rentals standing at 72. What’s interesting, though, is that this age, though high, is 20 years younger than the average office building that has previously been converted into multifamily, according to RentCafe.
This conversion trend is most prominent in Washington, D.C., which had 5,820 apartment units scheduled to be developed from former office spaces in the pipeline at the start of 2024. New York came in second with 5,215 units, while Dallas came in third with 3,163 units.
In the Midwest, Chicago came in fourth with 2,822 units set to transform from office to multifamily space. Cleveland came in sixth, with 2,012 units, while Cincinnati pulled up in the seventh spot with 1,563 and Kansas City, Missouri, claimeed the eighth spot witth 1,510 units.
Rounding out the Midwest were 11th-ranked Minneapolis with 1,334 units set to transform from office to multifamily space as 2024 began, Detroit with 1,070 units and Columbus, Ohio, with 1,006.
