Adaptive reuse surges to record 25K apartments, Chicago overtakes Manhattan as top city for conversions

The wave of adaptive reuse projects is accelerating at a record pace. After moderate gains and even some decreases in the years following the pandemic, the number of apartments resulting from converted buildings was close to 25,000 in 2024. That’s a whopping 50% more than the units delivered the year before and double the figures in 2022.

Looking ahead, conversion projects seem to gather momentum even further as nearly 181,000 apartments are now being converted, mostly from office spaces. Specifically, our analysis of Yardi Matrix data as of July shows that roughly 78,500 units are expected from the makeovers of former offices, followed by hotels with 35,800 apartments and industrial buildings with more than 31,000 units.

Hotel-to-apartment transformations stood out in 2024, delivering more than 9,100 new rental units. In comparison, office-to-apartment conversions produced about 5,900 units that same year, continuing to make up a significant share of all adaptive reuse projects.

Hotels lead with one-third of conversions, schools see biggest jump

Hotels have become the most prevalent form of adaptive reuse, reclaiming the top spot after first surpassing office conversions in 2023. The resurgence of hotel-to-apartment conversions is driven by squeezed profit margins, rising operating costs, uneven demand, a slowdown in the post-pandemic recovery, rising interest rates, and looming debt maturities. A combination of these factors have compelled many hotel owners to sell, fueling the surge in hotel-to-apartment conversions.

In fact, hotel-to-apartment conversions make up nearly 37% of all adaptive reuse projects, followed by office spaces with almost 24%, industrial buildings with roughly 20% and schools with 8%.

In other words, of the 24,700 apartments completed through adaptive reuse in 2024, more than 9,100 came from repurposed hotels. This marks an all-time high and a 46% increase over 2023.

Last year, developers focused almost exclusively on outdated hospitality buildings for adaptive reuse investments. As a result, more than 93% of newly converted apartments originated from Class B and C hotels, which are also more vulnerable to market uncertainty.

At the same time, revamped office buildings produced nearly 5,900 apartments in 2024, which means that one in four new converted apartments used to be an office. Here too, we saw a solid 34% rise compared to 2023.

Interestingly, seven out of 10 new apartments delivered in 2024 came from attractive and modern (Class A) office buildings. In contrast, offices with fewer amenities (Class B and C) accounted for just 28% and 1%, respectively, of conversion projects.

Notably, newer, high-quality buildings led the way in 2024 because they offer big advantages for conversions: They usually have modern infrastructure, great locations, and make more financial sense. On top of that, they’re especially attractive for luxury apartment projects, which match what many investors are looking for.

These trends are hardly surprising. A closer look at historical data reveals that hotel conversions gained significant momentum in the post-pandemic period.

As a matter of fact, by 2022, there were already more apartments resulting from hotel transformations (4,100 units) than from repurposed offices (3,100). The gap continued to widen and then peaked last year when 9,100 rentals came from hotel conversions and 5,900 from former offices.

This marks the second-highest total on record, just behind the 2020 peak, when roughly 6,000 units were created from unused office space. What’s more, this type of adaptive reuse is picking up speed after its decline at the start of the decade, although it still hasn’t caught up to repurposed hotels.

Other building categories also experienced impressive growth in 2024. Take schools, for instance: Nearly 2,000 apartments were created from former school buildings across the U.S. in 2024 — an all-time high and a fourfold increase versus 2023.

In that year, conversions of former educational facilities accounted for just 3% of all new apartments from adaptive reuse. Then, in 2024, that share jumped to 7.9% of the total, making it the fastest growing segment of adaptive reuse.

The reasons behind this growth include declining student enrollment numbers in some urban areas, as well as the high costs of renovating historic buildings. Many of these schools were built in the late 19th to early 20th century and required extensive work.

What is the top city for apartment conversions in 2024?

Chicago leads the nation with the highest number of apartments resulting from adaptive reuse projects in 2024, dethroning Manhattan, NY. In total, 880 units were delivered in the Windy City through the conversion of four properties, including an old typography business and a former Sears store. The latter is a landmark property in the Portage Park area that now offers 206 apartments and includes a retail component.

It’s worth noting here that Chicago is one of the most active cities in the nation when it comes to repurposing buildings. To that end, the revitalization of the La Salle Corridor in the Loop area includes several adaptive reuse projects. Some of these redevelopments have already received financial assistance from the local government. The ultimate goal of the program is to create 1,000 mixed-income units, with about one-third of them in the affordable housing category.

Second on our list is Denver with 789 units from conversions, more than double the number in 2023. One of the largest projects here is the transformation of a Clarion Inn hotel into Renewal Village, offering 215 units of supportive and transitional housing.

The Mile High City also launched an Adaptive Reuse Pilot Program for its Upper Downtown area that’s aimed at revitalizing the central business district by supporting office-to-residential conversions. A previous study released by the City and County of Denver had identified 21 downtown buildings that would make good candidates for conversion. Additionally, the state of Colorado also offers refundable tax credits for qualifying projects beginning in 2026 and beyond.

Not far behind is Philadelphia, where 761 units were delivered from adaptive reuse projects in 2024. These include the transformation of the historic Philadelphia Electric Company riverfront building from the 1920s, now known as The Battery. Spanning 500,000 square feet, the property has an impressive concrete façade and offers one-, two-, and three-bedroom lofts and apartments; coworking spaces; and a rooftop pool.

The fourth city by number of apartments from repurposed buildings in 2024 is Dallas with 698 apartments. Here, three adaptive reuse projects were completed in the city last year, including the first phase in the makeover of the 50-story Santander Tower in downtown Dallas. This office-to-residential $40 million conversion created 291 units under the name Peridot Residences.

Next, Manhattan dropped from last year’s top location to fifth this year for new apartments from adaptive reuse projects, despite the solid number of deliveries — 588 units. All of them are part of Pearl House, which is believed to be New York City’s second-largest post-pandemic office-to-residential conversion by unit count to date.

Keep in mind that each location in the top 10 cities by number of converted apartments in 2024 delivered more than 500 apartments, a significant change compared to 2023, when most cities had completed around 300 units.

Baltimore dominates hotel conversions, Manhattan holds office crown

The pandemic’s effect on tourism, conventions and business travel left many hotels in distress, particularly those in urban locations. This was the case with Baltimore’s Holiday Inn and Radisson Hotel — two adjacent towers in the city’s downtown that originally opened as the Statler Hilton in 1967.

While the Radisson closed in 2020, the Holiday Inn remained open until 2022, when it was acquired by Vivo Investment Group for a hotel-to-apartments conversion that was completed last year. The result was the nation’s largest hotel transformation in 2024, creating 550 apartments and propelling Baltimore to the top of the list of cities with the most units converted from hotels.

Florida, the nation’s top tourist destination, is home to the second- and third-highest numbers of apartments created through hotel conversions. In particular, runner-up Kissimmee, located near major attractions such as Disney World, has a surplus of hotels and an influx of workers in need of affordable housing. In this case, conversions check several boxes and are a smart way to repurpose existing buildings.

Accordingly, more than 500 apartments were completed in Kissimmee last year from hotel transformations and just as many are underway, making this Florida spot the top city for future hotel-to-apartment construction.

Similarly, Jacksonville, FL’s revitalization initiatives led to the creation of 423 apartments from former hotels in 2024. In this case, Florida’s more flexible zoning policies and municipal support have sped up adaptive reuse projects aiming to revive communities. One example is the transformation of a two-story Day’s Inn into Elevate at Baymeadows offering 107 units. A couple of other hotels nearby are also undergoing conversion to rentals.

Similarly, office conversions flourished last year in major Texas cities, but also in urban areas across the Midwest. Even so, Manhattan rose above all with a major transformation of a 1970s office tower at 160 Water St. into a modern rental that’s been branded Pearl House and now offers 588 units after the addition of five extra floors to the top. For this, developer Vanbarton Group worked with architect Gensler, which is known for several high-profile adaptive reuse projects across the U.S. and its commitment to reusing buildings.

Another New York metro area location ranks third this year — White Plains, a major commuter hub. Here, a former 1960s AT&T office building at 440 Hamilton Ave. was transformed into an apartment community offering 468 units in a variety of layouts.

Squeezed in between these two is Dallas, where two downtown office towers are now apartment communities offering a total of 584 units and high-end amenities. The first is Santander Tower, a 50-story skyscraper rebranded as Peridot Residences and comprising 291 units.

The second is a triangular high-rise originally designed by world-renowned architect I.M. Pei. Renamed The Sinclair, the building provides 293 apartments, thereby serving the demand for downtown residential living in Dallas.

Speaking of downtown living, the transformation of a vacant office tower in the heart of Houston into 372 apartments branded Elev8 is one of the largest projects of this kind in the country, earning the city fourth place among the top markets for office-to-apartment conversions.

Midwestern cities Cleveland, OH (#5); Detroit (#7); Minneapolis (#9); and Cincinnati (#10) are also among the top office converters nationwide with projects ranging from 201 to 367 units.

Adaptive reuse’s strong future: Record 181K units in the pipeline, mostly from offices

While the adaptive reuse trend has accelerated at an unprecedented pace in 2024, its growth story is far from over. Rather, around 181,000 apartments are in various stages of development across the country, according to Yardi Matrix data. This represents a 19% increase compared to the 151,000 units anticipated in 2024.

The majority is expected to come from repurposing around 430 office buildings, which would result in more than 78,400 apartments. In other words, 43% of upcoming adaptive reuse units come from office spaces, up from the previous year’s 38.5%. Manhattan is leading the charge in future office conversions with nearly 9,000 apartments in the pipeline.

 

Hotels follow, accounting for 20% of all future adaptive reuse projects with 35,800 anticipated units. Once again, Manhattan leads the way in hotel-to-apartment conversions with seven properties slated for repurposing and expected to deliver more than 1,700 units. Next are adaptive reuse projects involving industrial buildings, which represent 17% of upcoming conversions. Buffalo, NY, stands out as the most active city in this category as it’s planning to deliver 1,250 apartments by transforming 10 industrial buildings.

Yet, all eyes are on Manhattan, which leads the nation with the most apartments in the pipeline from future adaptive reuse projects with an impressive 11,000 units. Los Angeles follows in second place with roughly half as many (5,640 units). Not to be outdone, Chicago remains a major player in conversions, ranking third with an estimated 5,000 units.

Rounding out the list are Washington, D.C.; Philadelphia; Denver; Brooklyn, NY; Atlanta; and Dallas — demonstrating that major cities are actively transforming underperforming properties, revitalizing neighborhoods and continuing to adapt to the era of remote work.

Methodology

RentCafe.com is a nationwide apartment search website that enables renters to easily find apartments and houses for rent throughout the U.S. This report was compiled by the RentCafe.com research team based on apartment data as of July 2025 provided by our sister company Yardi Matrix. All data is accurate as of the date of publication.

For the purposes of this study, adaptive reuse refers to the process of converting an existing property for purposes other than those it was originally designated for. In cases where zoning and permitting for a site were changed to allow for the construction of a new apartment building on a property previously used for a different purpose, we also counted these as conversions. These changes reflect a shift in the intended use and character of the property, aligning with the broader concept of adaptive reuse. This study is based on apartment data related to buildings containing at least 50 units.

Data is subject to change. New properties and markets may emerge, while some properties might not be completed or maintain the same status (other than completed) for several years. Additionally, various factors — such as delays, sales, or project abandonment — can prevent completion of some properties.

Future projects encompass those currently undergoing conversion, as well as those in the planning and prospective redevelopment stages.

Yardi Matrix defines completed buildings as those that have received a certification of occupancy, whereas those under conversion have yet to receive it or are currently being developed. Planned projects are actively engaged in the redevelopment approval process, while prospective redevelopments hold lower status in the probability of completion because they remain subject to entitlement approvals.

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