Housing affordability is so squeezed that office-to-apartment conversions just spiked 484% 

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Pandemic era adoption of work-from-home and hybrid work models has left many office spaces unused, triggering a surge in expired leases and vacant office buildings. Simultaneously, the residential housing market remains resilient, with the number of active homes for sale in January 2025 sitting 25% below the levels recorded in January 2019.

It’d only make sense that many of these offices over time get converted into condos and apartments, right?

To gain a comprehensive understanding of the current office-to-apartment conversions landscape, ResiClub turned to RentCafe, an arm of property management software giant Yardi Systems.

Entering 2021, there were 12,100 office-to-apartment units in the U.S. conversion pipeline. Fast-forward to 2025, and that figure is now 70,700—an increase of 484% in just four years.

“This significant increase highlights the evolving nature of America’s cities that are driven by shifts in living preferences and changes in work habits,” wrote RentCafe in its latest report. “As office spaces are reimagined to meet the demand for housing, it’s clear that adaptive reuse is playing a key role in reshaping urban landscapes.”

According to RentCafe, the office-to-apartment unit pipeline (70,700) makes up 42% of the 169,000 units currently being converted from commercial properties into apartment units. It’s followed by hotel-to-apartment (22%), factory-to-apartment (11%), and warehouse-to-apartment (6%).

The biggest chunk of this 70,700 office-to-apartment unit pipeline can be found in New York (8,310 units).

Not too far behind is Washington, D.C. (6,533 units), Los Angeles (4,388 units), Chicago (3,606 units), and Dallas (2,752 units). 

From a big-picture perspective, the 70,700 office-to-residential conversion pipeline might not be as significant as it appears at first glance.

Look no further than the project at 219 E. 42nd Street in Midtown Manhattan, near Grand Central Terminal. The former Pfizer headquarters will be transformed from a 10-story office building into a 29-story luxury multifamily development, bringing 1,600 housing units to market in 2027.

This single conversion will be the biggest in New York City’s history and makes up 19% of New York City’s conversion pipeline and 2.3% of the U.S. conversion pipeline.

The 291,000-square-foot office building will be about 540,000 square feet after the additional 19 stories are added to the structure. For perspective, there are about 95 million square feet of office real estate available for lease in New York City alone.

Of the 55,339 office-to-apartments in some phase of development in January 2024, only 3,709 were completed by December, leaving 51,630 units that carried over into 2025, according to RentCafe’s report.

Why aren’t there more office-to-apartment conversions right now?

Commercial buildings may not be designed or constructed with residential living in mind. Converting office spaces into comfortable and functional apartments may require significant structural changes, such as adding windows or ventilation, or modifying floor plans. While office-to-apartment conversions can often be done faster, they often cost more than just building a new building.

Big Picture: While the conversion of office spaces into residential units is gaining momentum, it still remains a small segment of the residential housing market.

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