The pandemic has spurred a surge in conversions from vacant commercial spaces to residential units.

History of Rental Conversions

Creating rental apartments from former factories, office units, and warehouses is nothing new.  What is new is the surge of conversions from vacant commercial spaces into rental apartments.

RentCafe just released a study that looked at rental projects with at least 50 residential units developed in buildings originally designed for non-residential purposes.  Just as recently as 2010, 5,271 rental apartments were created from commercial spaces nationwide.  By the time 2019 rolled around, 11,788 residential units were created followed by 11,838 in 2020.

Then, boom, 20,122 projects are soon to be completed this year.  A whopping 52,700 rental apartments are slated to become available in 2022.

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Commercial Conversions Have Financial and Environmental Upsides

Having an empty hotel or office building collects no rent while occupied apartments do.  Likewise, it’s usually cheaper to convert an existing building than demolishing it and building a new one from scratch.

Secondly, demolishing and replacing buildings put more strain on natural resources/materials and create more waste than repurposing buildings for residential use.

10 Cities Where Most Commercial-to-Residential Conversions to be Completed in 2021

2020                   2021          Total Units 

  1. Philadelphia               742                  1,121            1,863
  2. Washington               250                   1,512           1,762
  3. Cleveland                  825                     354            1,179
  4. Chicago                     574                     561            1,135
  5. Los Angeles                60                     1,013          1,073
  6. Alexandria VA           520                     435               955
  7. Detroit                        0                      874               874
  8. Pittsburgh                 205                    609               814
  9. Kansas City MO         449                     217              666
  10. New York City           286                     328              614

Thanks to RentCafe.

 

 

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