2024 was a record-setting year for office building conversions

If empty offices were some of the lemons produced by the pandemic, office conversions are the lemonade. Savvy developers and city officials have spent the past few years finding ways to take vacant and undesirable office towers and turning them into much needed housing, among other uses. This year has been the most active on record, according to a new report.

The commercial real estate services firm CBRE finds that more than 70 office conversion projects have been completed so far this year, and 30 others should be done by the end of the year, for a total of 103. CBRE began tracking office conversions in 2016. That year 26 projects were completed, and the number has been growing slowly since then. The numbers began jumping up in the post-pandemic years and spiked in 2024. Compared to 2023, office conversions are up 63% in 2024.

CBRE’s report shows that most of these former offices are being turned into housing, accounting for 74% of the projects underway or completed this year. Other conversions include hotels, life sciences, and industrial spaces. But in most cities, and in the downtown business districts where many vacant office towers stand, the most desirable reuse option for these structures is multifamily housing.

The boom in office-to-housing conversions is being driven largely by plummeting values for offices, which have struggled to retain tenants in the aftermath of the pandemic. Even after the lockdowns of the pandemic lifted in many places, office vacancy rates have remained high across the U.S., reaching record levels of nearly 20% on average earlier this year. And though not every struggling office building is a good candidate for reuse as housing, a surprising amount are. That’s led cities from Calgary to Cleveland to New York to incentivize and streamline the process of getting conversion projects underway.

Given the multi-year timeframe of urban development projects, many of these pandemic-related conversion projects are finally coming online, which is why 2024 has been a record year. And according to CBRE’s report, it may be only a temporary record as 2025 is expected to see an even greater number of office conversions. There are already 94 conversion projects underway across the U.S., with another 185 planned, for a total of 279.