It’s true that converting office space to multifamily buildings is no easy task. But such conversions offer an opportunity for cities to remove outdated or obsolete office space and replace it with highly desirable rental housing.
This truth explains the prediction from RentCafe that the number of office-to-apartment conversions will soar across the United States in 2025.
In its Market Insights report published Jan. 30, RentCafe said estimates that the number of apartments set to be converted from office spaces in the United States will jump to a record-breaking 70,700 in 2025.
That’s up significantly from the 23,100 office-to-apartment conversions that the country saw in 2022.
RentCafe reported, too, that office conversions make up almost 42% of the nearly 169,000 apartments expected to result from future adaptive reuse projects.
You might think that only older office buildings are slated for multifamily conversions. That’s not entirely true. While most conversions do involve older properties, RentCafe reported that the adaptive reuse of office buildings built between the 1990s and 2010s is on the rise, jumping from 1.27% of past office-to-apartment conversions to a projected 7% of future projects.
The reasons behind the increase in office conversions aren’t complicated. The United States has a severe shortage of housing units. At the same time, the work-from-home movement means that a growing amount of office space is sitting vacant today, especially space in older properties that lack the amenities sought by today’s tenants.
One solution to both eliminate vacant office space and boost a community’s housing supply is to convert obsolete office space into multifamily properties.
Conversions, though, do bring challenges. The biggest? Most office spaces, even obsolete ones, aren’t good candidates for conversion to apartment properties. An office building needs to sit in the right location, preferably a walkable neighborhood close to public transportation, restaurants and shops.
The building itself must lend itself to conversion, too. If developers have to make too many changes to the property, the cost of conversion won’t make financial sense.
RentCafe reported that the number of future apartments resulting from office conversions has been on the rise since 2022. Back then, office conversions were expected to result in 23,100 new apartments. That number rose to 45,200 in 2023 and 55,300 in 2024, before hitting a projected record-setting 70,700 this year.
According to RentCafe’s report, more than 1.2 billion square feet of office space — equal to 14.8% of total office inventory — is considered suitable for conversion.
The office-to-apartment pipeline is strongest in New York City, with 8,310 future apartments expected to result from office conversions in 2025. Chicago leads the Midwest, with 3,606 future apartments projected from office conversions as of this year.
Dallas ranks high, too, with RentCafe reporting that the metropolitan area’s office-to-apartment pipeline stands at 2,725 units as of 2025. Minneapolis ranked seventh on RentCafe’s list, with an office-to-apartment pipeline of 1,873 units as of 2025.
Other area cities ranking high on RentCafe’s list include ninth-place Cincinnati, with an office-to-apartment pipeline of 1,753 units; 10th-place Kansas City, Missouri, 1,676 units; 12th-place Cleveland, 1,619; and 16th-place Omaha, 1,294.
