New adaptive reuse apartments are growing at a faster rate than new construction apartments, jumping 25 percent over the past two years, compared to a 10 percent increase in new construction apartments.
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Adaptive reuse conversions have surged since the onset of the pandemic, fueled primarily by office-to-residential conversions, according to a new report by the rental listings portal RentCafe.
New adaptive reuse apartments — apartments converted into residential units from another use — are growing at a faster rate than new construction apartments, jumping 25 percent over the past two years, compared to a 1o percent increase in new construction apartments, according to the report.
A whopping 28,000 new adaptive reuse rentals were brought onto the market between 2020 and 2021 alone, compared to 2018 and 2019, when just 22,300 apartments were brought on line.
The surge has been driven by office-to-residential conversions, which took off in 2020 when office buildings sat empty. Approximately 11,000 apartments have been carved out of former office buildings in just the past two years, according to the report, and the sector saw a 43 percent jump just between 2020 and 2021.
Washington, D.C. led the surge with the highest number of converted buildings during the pandemic with 1,565 converted units between 2020 and 2021. Washington was followed by Philadelphia and Chicago, with 1,552 and 1,139 converted units respectively.
Older buildings in urban downtown areas are the prime target for conversion projects, the report added.
“Existing building architecture is the critical starting point,” Doug Ressler, manager of business intelligence at Yardi Matrix, said in a statement. “Not all buildings are equally threatened by…