Berkeley Office To Residential Conversion Joins National Trend

A seven-story, circa 1980s office building in downtown Berkeley, CA, is poised to trade cubicles for bedrooms.​

A developer applied to convert 2001 Center St. into 58 apartments and a rooftop garden, according to a report from San Francisco YIMBY.​

Nord Ratree’s proposal comes as California’s recent housing laws converge with those in other states to make it easier to build new homes near major transit stops and streamline urban office-to-residential conversions. Converting underused and obsolete buildings, particularly offices, has steadily gained steam over the past several years.​

Adaptive reuse roared to a record year in 2024, turning nearly 25,000 aging buildings into new apartments and supercharging a fast‑growing pipeline of future projects, a RentCafe data analysis finds. Chicago seized the crown as the country’s conversion capital by unit count, while Manhattan cemented itself as the command center for blockbuster office and hotel makeovers now barreling toward delivery.​

Berkeley project fits with new California push

In October, California Gov. Gavin Newsom signed the Abundant & Affordable Homes Near Transit Act into law. It establishes statewide zoning standards that permit mid-rise housing within a half mile of major transit and links those projects to streamlined approvals if they meet affordability and labor requirements.​

“Housing near transit means shorter commutes, lower costs, and more time with family,” Newsom said in a statement as he signed the measures into law. He also signed the Office-to-Housing Conversion Act as part of a broader package that treats the adaptive reuse of offices and other commercial buildings as a key tool for meeting housing goals.​​

By targeting a site steps from BART, reducing parking requirements, and reserving units for very low‑income households, the 2001 Center Street project fits squarely within that policy shift toward infill, transit‑oriented housing, and reduced car dependence.​ State law now expects cities to legalize more multifamily housing near major transit, and projects that add deed‑restricted affordable units can often tap faster, more predictable approvals than conventional discretionary review.​​

Berkeley, meanwhile, has committed to adding 8,934 new homes between 2023 and 2031 under its state‑mandated housing element, with a focus on higher‑density sites downtown and along transit and commercial corridors.​ Converting office buildings, such as 2001 Center Street, into apartments helps the city make progress towards that target.​

Record year for conversions

RentCafe’s analysis of Yardi Matrix data shows that 24,735 apartments were completed through adaptive reuse in 2024, a roughly 50% increase from 2023, and about double the 2022 total. The research defines adaptive reuse broadly, counting both direct building conversions and cases where zoning changes allow new apartment construction on sites previously used for other purposes, limited to properties with at least 50 units.​​

The surge comes as developers and cities look for ways to absorb underused properties after the pandemic. Many downtowns are still adjusting to hybrid work and shifting travel patterns.​ With 181,000 additional units in various stages of planning and construction, the report concludes that the current wave is closer to a beginning than a peak.​​

Hotels out front, offices close behind

Office-to-residential conversions draw the lion’s share of attention; however, hotels were the leading source of conversions in 2024. Hotels accounted for nearly 37% of all adaptive-reuse apartments and delivered more than 9,100 units. That marks an all‑time high and a 46% jump from 2023.

The RentCafe report links the trend to squeezed margins, uneven demand, higher operating costs, and looming debt maturities, which are pushing many hotel owners to sell.​​

Office buildings generated roughly 5,900 apartments, or about one in four converted units, up 34% from the prior year and representing the second‑highest annual office conversion tally on record. Around 70% of the new units from offices came from Class A properties with modern infrastructure and prime locations, underscoring investor interest in high‑end projects aimed at the luxury market.​​

Schools and industrial buildings gain momentum

School conversions, though still a smaller slice of the market, were the fastest‑growing segment in 2024. Nearly 2,000 apartments were created in former educational buildings, a fourfold increase from 2023 that lifted schools’ share of adaptive reuse units from about 3% to nearly 8%.​​​

The report attributes the rise in school projects to falling enrollment in some urban districts and the high cost of maintaining or renovating historic facilities built in the late 19th and early 20th centuries. Industrial buildings also accounted for roughly one‑fifth of current and upcoming conversions, with cities like Buffalo planning large multifamily communities in former factories and warehouses.​​

Chicago takes 2024 crown

Chicago led all U.S. cities in 2024 with 880 apartments delivered through adaptive reuse across four properties, including the conversion of a former Sears store in Portage Park. The city’s broader LaSalle Corridor revitalization effort in the Loop, backed in part by public financing, aims to produce 1,000 mixed‑income units, about a third of them affordable.​​

Denver ranked second with 789 units, boosted by the Renewal Village conversion of a Clarion Inn into 215 supportive and transitional housing units and a city pilot program to encourage office‑to‑residential projects downtown. Philadelphia, Dallas and Manhattan rounded out the top five, with each of the top 10 cities delivering more than 500 converted units — a notable jump from 2023, when typical totals hovered closer to 300.​​

Future pipeline led by Manhattan

Looking ahead, roughly 180,585 apartments from adaptive reuse projects are in the national pipeline, a 19% increase over last year’s forecast. Offices represent about 43% of those future units, with hotels at 20% and industrial buildings at 17%.​​​

Manhattan stands out with an estimated 11,000 apartments planned or under development from conversions, including nearly 9,000 from offices and more than 1,700 from hotels. Los Angeles and Chicago follow with projected pipelines of about 5,640 and 5,000 units, respectively, while Washington, D.C., Philadelphia, Denver, Brooklyn, Atlanta and Dallas also register as major hubs in the next wave of adaptive reuse.