Trends to Watch: Office-to-Apartment Conversions

Posted on January 11, 2023

Farmington Hills, MI – (January 11, 2023) Now that a few years have passed since the beginning of the coronavirus pandemic, we’re beginning to get a better understanding of what the long-term changes offices will be experiencing. Without a doubt, one of the most significant changes is the growing number of companies permanently switching to hybrid work arrangements or letting people work from home full time. As popular as these arrangements can be, they can start a whole chain of effects. If a company’s space is being underutilized after switching to hybrid work, the company might choose to downsize. And if enough companies in an office building decide to downsize and move out, entire buildings can end up being underutilized. An office complex that had been thriving with activity in 2019 may now have lots of unoccupied space and fewer people coming into the offices that are still being used. This leaves building owners with the question of how to revitalize their spaces.

Office-to-Apartment Conversion Trends

Office-to-apartment conversions have become a popular type of adaptive reuse project. According to RentCafe, office-to-apartment conversions increased 43% between 2020 and 2021 compared to the two years prior, reaching an all-time high. Between 2020 and 2021, apartment conversions grew 25% faster than new apartment construction. Since these numbers include 2020, the data suggest that office-to-apartment conversions were already trending upward before the pandemic.

Out of all apartments created through adaptive reuse projects between 2020 and 2021, office buildings were the most common type of building converted. RentCafe’s report states that office buildings accounted for 40% of all building types converted into apartments during this time. Other types of buildings being used for apartment conversions include former factories, hotels, and warehouses.

Office-to-apartment conversions are expected to continue trending in the coming years, but given the amount of time it takes for leases to end and for conversion projects to get underway, it will take time to see how extensively the pandemic directly shapes this trend in the long run.

An apartment's kitchen with three blue chairs next to the counter.

The Benefits of Office-to-Apartment Conversions

Adaptive reuse construction projects can have lots of benefits in general, such as being more environmentally friendly than brand new building construction, preserving older buildings, and bringing new life to areas. Office-to-apartment conversions in particular can be an option worth considering since office buildings often have features that can make them great places to live as well as work.

Office buildings tend to be located in areas that are close to main roads with other businesses nearby, such as restaurants and stores. The buildings themselves may have existing features that would be attractive to potential residents, such as elevators and parking lots/garages. Office buildings may even have amenities that could be repurposed for use in an apartment building. A fitness center, for instance, could easily be kept on as a feature for residents to use. Existing communal spaces could also potentially be reinvented into new features. Office buildings can also be good candidates for conversion to mixed-use buildings with a combination of residential and commercial spaces.

One reason why office-to-apartment conversions have been getting a lot of buzz lately is because so many places have a shortage of available housing, but many office buildings are now under occupied. These conversion projects can be a way to help increase housing while putting existing buildings to good use.

The bedroom of an apartment.

Tremont Madison Office Conversion

Office-to-apartment conversions can involve a lot of challenges, but they’re a type of project Premier Construction & Design has experience working on. In our Tremont Madison office conversion project, we started with an outdated, 60,000 square foot office building with 25% occupancy and transformed it into a modern apartment building with 57 units, ranging from studio apartments to 2-bedroom, 2-bath apartments.

Interested in converting an office building into apartments? Contact us. We’d love to learn more about your project and start developing a plan for your space.