Office-to-residential conversions continue to grow across the nation, and the same is true in the Phoenix metro area.
A new report from RentCafe shows there are more than 70,000 apartments that will be converted from office spaces across the U.S. this year. That’s an increase from 55,000 last year, 45,000 in 2023 and 23,000 in 2022.
The numbers coincide with a sharp drop in demand for downtown office space during and after the height of the COVID pandemic. At the same time, housing inventory in most markets across the nation remains low.
“Office-to-apartment conversions are surging in popularity, with 2025 set to reach a record-breaking milestone of almost 71,000 units in the pipeline,” the report said. “More than just creating housing, this trend reflects a shift toward sustainable, community-focused urban spaces that cater to the evolving lifestyles and priorities of modern American cities.”
Phoenix is No. 11 among U.S. metro areas with 1,634 units in its office-to-apartments pipeline, a 19% increase compared to 2024. Phoenix is No. 2 among cities in the western third of the U.S., behind only Los Angeles, for office-to-apartment conversions planned for 2025.
The metro areas with the biggest year-over-year percentage increases in office-to-apartment conversions are Boston (160%); Jacksonville, Florida (150%); Omaha, Nebraska (141%); and Charlotte, North Carolina (107%).
The cities with the most office-to-apartment conversions planned in 2025 are:
- New York City (8,310)
- Washington, D.C. (6,533)
- Los Angeles (4,388)
- Chicago (3,606)
- Dallas (2,725)
- Atlanta (2,239)
- Minneapolis (1,873)
- Charlotte, North Carolina (1,787)
- Cincinnati (1,753)
- Kansas City (1,676)