Record office-to-residential conversion planned in US
Publication date: 31.01.2024
More than 55,300 apartments will be converted from office buildings this year, more than four times more than in 2021, according to a survey by analysts. While demand for residential space continues to drive growth, the 22% year-on-year rise is modest compared to the previous two years.
The pace of growth in such redevelopments has slowed this year due to higher financing costs and lengthy waits for zoning and permitting, and the trend is expected to continue, experts say.
Experts say local and state governments are increasingly pushing refurbishment, especially as more office buildings "remain vacant in the wake of the pandemic due to the advent of hybrid work and a preference for newer, more efficient office space."
The ranking of cities planning office conversions is as follows:
The leader is Washington, where office redevelopment is planned for 5,820 apartments, an 88% increase over last year. It is followed by the New York area, where 5,215 new apartments are planned to be built on the site of former office space. A significant contribution to New York's growth will come from the redevelopment of the Manhattan office formerly used as the headquarters of JPMorgan & Chase. It will contain 1,263 apartments, making it the largest project of its kind in the country.
In third place, Dallas will see 3,163 apartments go from office, accounting for 83% of all redevelopments and the highest rate among the top cities. Last year, Dallas added more jobs than any other major city, and the number increased by nearly 140,000 in November 2023.
Meanwhile, Chicago is in fourth place despite a 9% drop from last year. The largest project in the city is expected to deliver about 430 apartments, representing about a third of the total number of apartments that will be created in the city through the redevelopment of former corporate buildings.