Conversion of old buildings into apartments is now a real "thing." Hotels, offices, factories, warehouses, all are fair game if they meet the necessary conditions. In 2023, 12,713 new apartments emerged into new life from dormant structures, and 151,000 new ones are in the process of conversion – up 24% from the 122,000 projected in 2022.

"While office conversions are the darlings of future adaptive reuse projects, it was hotel conversions that stole the show in 2023," RentCafe reported in a new study. Repurposed hotels gave rise to 4,556 new apartment units – an all-time high and up 38.8% from the previous year. Class B hotels accounted for 60% of these conversions, followed by Class A (21%) and Class C (18%).

The pandemic, which caused a flight to quality, placed a financial burden on outdated hotels that not only lost customers but also faced high debt service costs. However, they still had assets that developers seized on. "Because hotels already come equipped with essential infrastructure (such as plumbing and electrical systems), these adaptive reuse projects offer a faster and often more cost-effective method to create housing units, particularly in dense, urban areas where space for new construction is scarce or pricey," the report noted.