A total of 10,090 apartments were created in 2022 by converting other commercial real estate properties into housing, according to a new RentCafe analysis of Yardi Matrix data.
Office buildings were the main source of converted apartments last year, with a 33.6% share of all building types that were transitioned into housing. A total of 3,390 apartments were created from former office buildings last year. Although this is down considerably from the 2020 peak of 6,874 new units, this conversion type accounts for the highest share of all adaptive reuse projects.
Hotels accounted for 2,954 last year or a 29.3% share, the highest percentage ever recorded for this sector. Other commercial property sectors being converted into apartments included factories at a 12.3% market share, health care properties at 6.2% and warehouses at 4.8%.
Los Angeles topped the list of cities for converted housing, with 1,292 that accounted for 13% of retrofitted units nationwide in 2022. Kissimmee, Florida, ranked a distant second with 648 units for a 6% nationwide share.
Yardi Matrix is forecasting a total of 122,000 apartments in different conversion stages will enter the housing market in the near-future years, a 63% increase compared to 2021, when future projects totaled 77,000.
“Creative approaches are increasingly being sought to deliver net new affordable homes — leveraging of public assets, public financing tools, new legislative authorities, funding, and, importantly, more solutions with the private sector,” said Doug Ressler, senior analyst and manager of business intelligence at Yardi Matrix. “These solutions include corporate funding and deeper alignment with traditional multifamily housing developers and investors.”
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