With Record-High Office Conversions Nationwide, Philly Ranks 14th

This year sees a record high of 55,339 planned office-to-apartment conversions, with Philadelphia coming in as the 14th metro area with the most conversions, according to a report by RentCafe.

With more people working from home post-pandemic, more employers continue to ditch office spaces. Since 2021, office-to-apartment conversions have more than quadrupled from 12,100 to 55,339 units. Office conversions now account for 38% of the 147,000 apartments in future adaptive reuse projects nationwide. In comparison, hotels (24%), factories (13%) and healthcare buildings (6%) are also being converted into living spaces.

Most of the offices that are being converted are newer spaces, with the average age of office buildings to be transformed this year being 72 years old, which is 20 years younger than those previously converted. This may suggest a preference to convert office buildings that require less investment.

This year, Philly plans on converting 975 apartment units from office spaces, which is 19.1% of the region’s conversions and a significant increase of 136% year over year. Notably, of the top 20 metro areas making conversions this year, Philly has the greatest year-over-year change, with Phoenix, Arizona, coming in second at 114%.

The 1701 Market Street project is at the forefront of adaptive reuse in the area, intending to transform an office building into 325 new apartment units. Part of the building has already been converted into a parking garage.

Leading the country, Washington, D.C., and New York City have the most planned office-to-apartment conversions for this year with 5,820 and 5,215 future units, respectively.