D.C. commercial property owners and developers are leading the nation in office-to-residential building conversions, and there are plenty of properties to choose from.
RentCafe reports office-to-apartment conversions in the D.C. region that are either underway or in the pipeline will create more than 5,800 residential units, almost double the residential conversions planned in 2023.
Residential conversions represent 65% of all repurposing projects of older office buildings, followed by hotels, industrial use and healthcare buildings.
Repurposing office buildings is one viable way to address the D.C. region’s rising office vacancy rate.
According to real estate firm CBRE, nearly 80 million square feet of privately-owned office space in the D.C. area was empty at the end of 2023. It reports the office vacancy rate in the D.C. region is now 21.1%.
The D.C. region leads major metros for office-to-residential conversion, but it is a redevelopment tactic that has grown exponentially throughout big cities.
RentCafe reports such conversions nationwide have swelled from about 12,000 planned units in 2021 to more than 55,000 units this year.
RentCafe reports that behind this shift lies a crucial factor: $150 billion in office mortgages are due in 2024. Those mortgages and the surge in residential demand have developers leaping at the chance to repurpose large, aging buildings.
Behind the D.C. metro area, other top metros for office-to-residential conversion are New York, Dallas, Chicago and Los Angeles.
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