Real Estate

Converting Factories Into Homes

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As the pandemic stretches on, office buildings sit empty as their tenants work from home, and brick and-mortar stores continue to lose ground to online shopping. Witness the bankruptcies of major retail giants J.C. Penney and Neiman Marcus, and the pile of Amazon deliveries in your building lobby, as clear evidence.

Some developers are already responding to these changes by converting nonresidential spaces for other uses, including as residences. But this idea isn’t new — just look at Manhattan’s SoHo neighborhood, once home to manufacturing and now among the city’s most expensive residential areas, known for lofts converted from factory floors.

A recent study by RENTCafé examined the conversion of commercial and institutional spaces to homes over the past seven decades, and found that they’ve never been more prevalent, with the 2010s posting a record number of such conversions.

The study, which informs this week’s chart, reports that across the U.S. during the 2010s, 96,544 units were created in 778 buildings that were formerly schools, factories, offices or other nonresidential spaces. (The study only considered buildings with 50 or more units.) In the 2000s, 63,989 units in 467 buildings were converted. Back in the 1950s, just 2,002 units in 14 buildings across the country were converted. Not surprisingly, New York topped the list for most residential units, although several cities converted more buildings.

Factories have been the most popular conversion targets, followed by hotels, office buildings, schools and warehouses. An encouraging finding: 42 percent of units created in those repurposed spaces were aimed at middle-income renters, and 23 percent included units within the reach of low-income renters.

This week’s chart shows the cities in which the greatest number of residential units were created from other kinds of buildings in the 2010s, as well the type of building most commonly converted.

Conversion to Residential Use

The cities with the most residential units created in the 2010s from spaces originally intended for other purposes, and the most common type of building converted.

No. of

buildings

converted

No. of

apartments

created

Most

common

building type

New York

Chicago

Philadelphia

Los Angeles

St. Louis

Baltimore

Richmond, Va.

Cleveland

Kansas City, Mo.

San Francisco

73

91

85

74

62

47

43

36

43

40

18,488

14,167

11,266

10,569

7,197

6,503

5,625

5,356

5,305

4,912

Hotel

Hotel

Factory

Hotel

Factory

Office

Factory

Office

Office

Hotel

Source: RENTCafé

By The New York Times

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