L.A. Among Top Markets for Apartment Conversion Projects

Los Angeles is among the top markets in the US for apartment conversion projects. A recent report from Rent Café by Yardi analyzed the number of historic buildings that have been converted into apartment buildings since the 1950s. In Los Angeles, there have been 74 historic buildings converted into apartment buildings in the last seven decades. As a result, the market ranks third in the nation for apartment conversions like this.

“Conversions and adaptive reuse projects are nothing new, but decade-by-decade, developers kept embracing the residential potential of older buildings,” Alexandra Ciuntu of Rent Café tells GlobeSt.com. “The reasons go from time and cost efficiency to more sentimental ones, like adding nostalgic value to a project or keeping communities grounded in their history. The overall redevelopment process for an existing building is easier than that for new construction, especially when it doesn’t involve footprint or lot size changes.”

Existing projects are also relatively easy, straightforward and faster than a ground-up project. “Underutilized and even abandoned buildings might prove easier to build upon and repurpose compared to starting a project from scratch,” says Ciuntu. “And reducing the development time can lead to lower construction costs in the end. In addition, more and more cities have preservation programs that go hand in hand with conserving historic buildings while repurposing them according to current community needs—in this case, rental supply.”

Los Angeles is a perfect market for these projects. In addition to higher development costs—which help fuel conversion activity—the market also has an abundance of vintage buildings. “It all comes down to the number of existing buildings with the potential to be repurposed, and Los Angeles has that in abundance thanks to its rich past,” says Ciuntu. “The city has a vast inventory of old hotels and office buildings, repurposed mostly based on economic drive. In fact, it has the most office-to-apartment conversions in the U.S. Culture hubs like LA have a rich history, and nothing embodies that more than old buildings. What makes it such a great market for adaptive reuse projects it its position as an arts and entertainment hub, which allows for a conversion mix with more historic flavor. Old villas that used to belong to Golden Age Hollywood celebrities, iconic entertainment buildings, or Art Deco commercial staples of a bygone era makes L.A. one of the most attractive areas for conversion projects.”

Ultimately, these projects help to augment the supply of attainable housing. Of the 74 projects, 44 have been for middle or low-income housing. “According to our data, 65% of the buildings converted nationwide these past seven decades have been aimed at middle- and lower-income renters, while in LA, 60% are on the affordable side,” says Ciuntu. “Out of the 74 repurposed buildings turned apartments since the 1950s, 21 are fully affordable—many of them former hotels. Given the high percentages, we can say adaptive reuse became a popular affordable housing initiative.”