According to a recent report from RentCafe, the future looks bright for commercial-to-apartment conversions in California, despite a slowdown in completed projects over the past year. The state currently has nearly 14,000 apartments in various stages of development for such conversions.
While hotel conversions have gained popularity nationwide, California is showing a strong preference for office conversions. In fact, there are currently 4,306 office-to-apartment conversion projects in the pipeline – accounting for 31% of all planned conversions. This trend addresses both office vacancies and housing scarcity within the state.
Leading this movement is Los Angeles with an impressive projected total of 5,881 apartments from adaptive reuse projects – surpassing Manhattan’s pipeline and taking first place nationally. However,the city’s share of apartment conversions from offices falls slightly below the statewide average at approximately 29%.
Fresno comes second with its own significant pipeline at1 ,111 units – including an impressive conversion project that will bring about795 new units from a former healthcare building.Sacramento,San Diego,and San Jose round outthe top five citiesin terms of numberof plannedconversionswithinCalifornia.
Overall,it appears that Californiais poisedto seea substantial increaseinapartmentsfromcommercial-conversionprojectsinthe nearfuture.This trendwill not onlyaddressofficevacancies,butalsohelpalleviatethehousing shortagefacingthestate.RentCafereportsuggeststhatthisisjustthebeginningofwhatcouldbea thrivingmarketforcommercialto-apartmentconversionsacrossCalifornia.
