Office-to-apartment conversions in California are accelerating, particularly in Los Angeles and San Francisco, as developers seek to address housing shortages and repurpose vacant office space.  

According to a report from RentCafé, Los Angeles ranks third in the nation for future office-to-apartment conversions, with 4,388 units in the pipeline—an 80% increase from last year. 

Los Angeles also has significant potential for further conversions, with 83 million square feet of office space — roughly 25% of the metro’s total inventory — deemed suitable for residential redevelopment. One high-profile example is the transformation of ARCO Tower, a 33-story office building at 1055 Seventh St., which is being redeveloped into apartments. 

San Francisco, which has also seen a rise in office vacancies, has taken steps to encourage conversions. The city has updated its building codes, revised its Planning Code, and created a dedicated financing district to streamline approvals and provide financial incentives for redevelopment projects. 

The trend extends beyond California, with nearly 71,000 apartments expected to be created from office conversions nationwide in 2025, a significant increase from 23,100 in 2022. Office-to-apartment conversions now make up 42% of all adaptive reuse projects in the U.S., reflecting a shift in urban development strategies. 

Another key trend identified in the report is the growing focus on converting newer office buildings — those built between the 1990s and 2010s. While only 1.27% of past conversions involved these newer buildings, they now represent 7% of planned projects. These structures are often more adaptable to residential use, making them attractive candidates for redevelopment. 

Despite the growing momentum, the feasibility of conversions remains a challenge. RentCafe’s report notes that while interest in adaptive reuse is rising, only a fraction of projects reach completion within a single year. In 2024, of the 55,339 office-to-apartment units in some stage of development at the beginning of the year, just 3,709 were completed by year’s end, with the remainder carrying over into 2025. 

For California landlords, office-to-apartment conversions present new opportunities to expand their portfolios and meet the state’s high demand for rental housing. As local governments explore policies to facilitate conversions, adaptive reuse could become an increasingly important tool in addressing California’s ongoing housing crisis.