Apartment conversions have increased 25% from pre-pandemic numbers, with 28,000 new apartments hitting the market nationwide in the last few years. It’s an increasingly popular real estate niche, repurposing well-located, available buildings, and considering that certain sectors continue to see more activity than others, it just makes sense.
The U.S.-wide surge in adaptive reuse projects is mainly led by office-to-apartment conversions, 11,000 new rentals between 2020 and 2021, and in Chicago? Over 1,100 new apartments were opened by repurposing unused buildings, according to a new report by RentCafe. Of them, 64% of them office redevelopments, pushing Chicago to No. 3 in the U.S. when it comes to adaptive reuse projects, behind Philadelphia and Washington, D.C.
Developers are jumping on these projects, and now, it seems there’s more opportunity than ever. Seven hundred thirty-two new units were recently created solely by repurposing three former office buildings. That means if you’re a renter in this metro, chances are your apartment was once an office space, too.
While that might not come as a shock, RentCafe also found that adaptive reuse apartments reflected more growth than traditional new apartment construction during the period analyzed—25% versus 10%.
But this concept isn’t new, despite the heightened buzz in recent months. In fact, Chicago’s all-time high in office-to-apartment conversions occurred in the 2010s, based on the report, with some of the most well-known being The Draper, 820 South Michigan and 21st Street Lofts.
Former warehouses, retail stores and residential buildings have all been given new life, including the now-called 850 Lake Shore Drive, a building that once housed the Lakeshore Athletic Club and hosted trials for the 1928 Olympic Games, and the Lofts at River East, which was formerly a shipping dock, according to RentCafe.
Many of these projects are aimed at the lower- and middle-income population, and Chicago offered 68 affordable repurposed rentals in 2020 alone. With the amount of unused office space in the market, it’s only just begun: Yardi Matrix found that 77,100 future apartments are currently in the process of conversion, with office buildings projected to represent the largest share. Some are set to be completed soon, while other projects are being planned or waiting for approval.
