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Given a nationwide shortage of housing and an excess inventory of office space, it shouldn’t come as a jolt that underutilized office towers are being given top-to-bottom makeovers to appeal to investors and renters alike. Depending on architectural qualities and other factors, empty offices—particularly Class B and C properties—provide a big opportunity for developers to create unique apartments, schools and mixed-use structures.
From 2021 to 2024, the adaptive reuse of old office space has more than quadrupled, with the number of newly created apartments surging from 12,100 to 55,300 in just four years, reports RentCafe, a national apartment search site.
The trend isn’t abating, and the numbers don’t lie.
Absorption of office space is expected to remain negative through the rest of 2024 and 2025, according to the NAIOP Research Foundation’s Office Space Demand Forecast, with national office net absorption totaling negative 13.4 million square feet in the first quarter. Net absorption will increase slightly in 2025, totaling negative 4.5 million square feet, NAIOP says. Meanwhile, office-to-apartment conversions are said to make up 38% of the 147,000 apartments planned for future adaptive reuse developments.
According to RentCafe, office buildings being transformed into apartments now average 72 years of age, two decades younger than those converted before 2021. Cities registering the highest conversion volume are Washington, D.C. (with 5,820 units), New York City (5,215 units) and Dallas (3,163 units).
Not all office buildings, however, are prime candidates for conversion. Steven Paynter, architecture firm Gensler’s global building transformation and adaptive reuse leader, created a conversion algorithm to quickly assess office building stock. After conducting an initial analysis of more than 300 buildings in 25 North American markets, the firm went on to assess more than 1,300 possible conversion candidates.
The finding: About 25% of the buildings scored are suitable. Location, floor plate size, context, building form and other factors determine a building’s appropriateness.
Read on as we traverse the country from east to west and back again, presenting commercial professionals’ perspectives. When buildings are appropriate conversion candidates, the results can range from nice to magnificent.
55 Broad Street, Manhattan
Dating back to 1967, this 30-story, 410,000-square-foot tower is situated only blocks from the New York Stock Exchange in Manhattan’s Financial District. It housed Goldman Sachs’ headquarters until 1983, followed by various commercial tenants over the last few decades.
A conversion now underway, designed by CetraRuddy for owners Metro Loft and Silverstein Properties, will yield 571 apartments.
Due to revisions over time to New York City’s zoning code, a building of 55 Broad Street’s scale and square footage couldn’t be built on the same site today, resulting in an inherent advantage to repurposing the existing building, says John Cetra, co-founding principal of CetraRuddy. In addition, the building’s vintage makes its design particularly appropriate for residential use.
Specifically, it is designed with a series of setbacks that enabled designers to create three different floorplates. Larger floorplates on the first six floors allow for flex spaces or home offices. Higher up, the setbacks yield floorplates comparable to those in typical new apartment communities and provide opportunity to carve out private outdoor space in a selection of residences.
One of the challenges at 55 Broad Street was the decision by some commercial tenants to remain until their lease terms ended, requiring a mechanical workaround to minimize disruptions to their operations during construction.
The LaSalle Residences, Chicago
Designed by Daniel Burnham, the 21-story building for Continental and Commercial National Bank was completed in 1914 and placed on the National Register in 2007. The ground-level through 12th floors are home to a J.W. Marriott hotel, with floors 18 through 21 recently becoming The LaSalle Hotel.
A new project by Lamar Johnson Collaborative aims to create apartments on floors 13 through 17 to serve emerging needs for Chicago’s growing South Loop.
The building’s typical office floorplate of approximately 42,850 square feet is well suited to residential conversion. Floorplate depth and an internal courtyard combine to offer appropriate levels of natural light for residences. The floorplate size also delivers an efficient spatial organization for a variety of unit layouts. Four elevator and stairwell cores facilitate efficient vertical movement of building residents and hotel guests.
Success will be measured in several ways, according to Alfredo Marr, principal at Lamar Johnson Collaborative in Chicago. “Quantitatively, success will be established by occupied hotel guest rooms, apartment leases and traffic to the restaurants,” he says. “Qualitatively, success will be seen as pedestrian traffic along LaSalle and Adams Streets increases and 24-hour activity returns to the Chicago Loop.”
Travis Building Residences, San Antonio, Texas
The 100-year-old Travis Building is a 10-story, 64,000-square-foot structure on the San Antonio Riverwalk in the city’s downtown district. It formerly housed commercial and office space. Conversion resulted in 63 fully leased luxury apartments and 20,000 square feet of commercial space, with the last space soon to become a new restaurant.
Slowing demand and the fact the office floors hadn’t been updated in four decades resulted in growing vacancies. The need for convenient housing downtown and the Travis Building’s historic character made this a natural for office-to-residential conversion. Retention of the original tile floors in the corridors and wooden floors in the units imbued the building with a distinctiveness that newer buildings can’t replicate, says Kris Feldmann, owner and design principal at CREO Architecture.
“The original office floors had central shared restrooms for office tenants, so when designing each floor for seven residential units, the introduction of seven kitchens and eight total bathrooms presented major challenges when coordinating the plumbing system,” Feldmann says. “With a concrete structure, plumbing fixtures had to be strategically placed to miss concrete beams, while accounting for required drain line slopes back to primary riser locations. To address these challenges, hundreds of iterations for residential unit floor plans were developed and studied.”
Lease-up served as the first round of success. “The second round of success will be measured by the project’s ability to act as a catalyst for the surrounding area, as it sits on a prominent corner in downtown San Antonio,” he says.
Peyton Building, Spokane, WA
This eight-story timber-frame structure was originally built in 1890 and rebuilt after a fire in 1912. A $34 million project by 4 Degrees Real Estate is in the preconstruction stage.
The plan is to convert the building to 96 apartments above ground-floor retail. The structure is situated at 10 N. Post, in the center of downtown Spokane, two blocks from Riverfront Park and Spokane Falls, an eye-catching Spokane River feature.
“Th e building’s rectangular shape and generous window line provides the perfect shell for a broad assortment of apartment sizes,” says Michael Sharapata, JLL Spokane senior managing director. “Tax incentives, which include abatement of property tax for residential conversions, help off set the cost of construction. Long-term capital gains tax exemptions also create opportunity, as the building sits in an opportunity zone.”
Regency Palms, Long Beach, CA
One of the few Long Beach, Calif., structures left standing after a 1933 earthquake, this is a 1920s art deco office building restored and converted to senior living units by national architecture and design firm KTGY. The firm replaced the windows but repaired and repainted the window frames in order to maintain as much of the original design as possible. The limestone-clad concrete building’s street-level facade was restored to its original granite, and new awnings matching early photos were installed.
These projects play a key role in strengthening and revitalizing urban neighborhoods, turning moribund 9-to-5 commercial districts into dynamic 24-7 destinations.” -John Centra
The lobby was restored to its historic splendor, and the building’s original brass mailboxes were preserved in a nod to authenticity. A ground-level café beckons to the public, while an urgent care facility provides easy health care access, enhancing residents’ connection to the surrounding community.
Preston Centre, Columbus, Ohio
Completed in 1974 and formerly used as a PNC Bank office tower, the 24-story building is the 15th tallest in Ohio’s capital city. Built in the form of six towers, the Skidmore Owings & Merrill–designed tower boasts good bones and lent itself to conversion because the upper levels of the taller towers offer abundant window space.
The project converted floors 10 to 23 into 105 apartments surmounting myriad hurdles. Floors had to be reframed, new HVAC and plumbing lines added, a two-story glass lobby removed and—in a step adding $7 million to the project’s cost—a larger elevator added to replace two existing elevators, says Jeff Edwards, president and CEO of Edwards Companies. Floor-to-ceiling windows flood apartments with light.
“Preston Centre is more than a beautiful building,” Edwards says. “It’s a mixed-use collection of businesses, retail and 105 apartments connected by 24 stories [offering] the perfect reflection of the area’s vibrant past, present and future.”
Pearl House, Manhattan
As originally built in 1972 in New York City’s Financial District, the office building then known as 160 Water Street featured 24 stories and 480,000 square feet. The converted building, now known as Pearl House, encompasses 30 stories and 530,000 square feet, with 588 rental units and such upper-tier amenities as a bowling alley, golf simulator room, two sports immersion suites and co-working space.
A half-dozen qualities rendered it ripe for conversion, says Peter Shu-Yen Wang, principal and design director with Gensler. Among them: High floor-to-floor elevations allowing for nine-foot ceilings in residences, exposure on three sides enabling better views and daylight, and an ideal facade. “To make it adaptable to residential use, we had to convert the fixed single-pane windows to insulated operable windows, improving the building’s thermal performance,” Wang says.
The addition of floors required the installation of lateral bracing from top to bottom, presenting a challenge that was solved through Gensler’s expertise in unit planning. “We wound up with a diagonal steel structure running through the building. [We concealed all these structural beams] by placing walls without compromising the unit layouts, while meeting all residential planning codes and also accommodating plumbing risers, electrical risers and everything that goes in,” Wang says.
