Commercial spaces are increasingly being repurposed for rental properties due to vacancies throughout the pandemic, according to a recent study by RentCafé.
With a total of 20,122 rental units set to be completed just this year, office and hotel conversions are becoming a rising trend in the residential building sector, says New York Times' Michael Kolomatsky.
The study looked at rental projects with at least 50 residential units developed in buildings originally designed for other purposes. In 2010, 5,271 such rental units were created across the country, kicking off a trend that grew each year through 2017. After a lull in 2018, 11,788 units were created in 2019, followed by another 11,838 in 2020.
This year, a whopping 20,122 are slated to be finished.
A bulk of the conversions have come in former offices and hotels. Amid the pandemic, many companies are downsizing as remote work becomes more prevalent, and hotels — already more or less set up for residential use — are faltering as tourism continues to suffer.
The trend of adapting commercial space to rental homes is easily understood in dollars and cents: Empty offices and hotels generate no rent, and it’s usually less expensive to convert an existing building than to demolish it and build a new one. But there’s an environmental upside too: Demolishing and replacing buildings strains natural resources and produces more waste compared with converting them for residential use.