Dan Rafter
What to do with outdated office, hotel and other commercial spaces? Many owners are turning these hard-to-lease spaces into apartments. And according to RentCafe’s first quarter Adaptive Reuse Report, this trend is only getting stronger.
It’s true that only the right commercial property is a good fit for an adaptive reuse. Location matters: Converting an outdated office building to apartments won’t work if that building sits in an undesirable location that renters don’t want.
Costs are important, too. If it costs too much to convert an old hotel or office space into apartment units, owners might instead consider leveling the entire property and starting from scratch.
Despite these challenges, RentCafe found that owners and developers are tackling adaptive reuse projects at an ever-greater pace.
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What does the future hold for adaptive reuse projects? Yard Matrix numbers show that the pipeline of adaptive reuse projects is full, with 151,000 new apartment units now in various stages of the conversion process. Construction on 40,000 of these apartment units is already underway.
RentCafe said that 58,000 of these projects stem from office conversions.
I know adaptive reuse is not a foreign concept, especially in Omaha with many office to residential conversions downtown over the decades, and CPP and rumored old MoO HQ more recently, but we'll keep seeing these throughout the country.
