Key Insights
- Converting all vacant office space nationally could create about 1.25 million new apartments.
- 72.5% of U.S. cities saw office vacancy rates rise year-over-year.
- New York – Midtown alone could add 78,121 apartments from its empty offices, the highest of any city.
A new study by The Kaplan Group analyzes office vacancy trends and the number of apartments that could be built if all empty offices were turned into homes across 91 major U.S. cities. As remote and hybrid work reshape the commercial real estate landscape, office vacancy rates have continued to climb, leaving millions of square feet of space unused.
Rising National Vacancy Rates
Over the past five quarters, the national office vacancy rate – the percentage of office space that is unoccupied and available for rent or reuse – has increased from 19.7% in Q1 2024 to 20.8% in Q1 2025. This adds up to 5.44 billion square feet of vacant office space nationwide, which could be turned into approximately 1,246,828 apartments, based on the average U.S. apartment size of 908 square feet.
Most cities are experiencing the same trend. Out of 91 cities analyzed, 66 (about 72.5%) saw their office vacancy rates rise year-over-year. With so much vacant office space, there is a significant opportunity to address housing shortages by converting these offices into apartments.
Key Markets for Conversion
To better understand where the greatest opportunities lie, we examined three dimensions: total conversion potential (total apartments that could be built if all empty offices were turned into homes), current vacancy rate, and vacancy growth.
Top Cities by Conversion Potential (most apartments possible)
- New York – Midtown, NY (78,121 apartments)
- San Francisco, CA (61,603 apartments)
- Dallas, TX (57,247 apartments)
- Houston, TX (52,925 apartments)
- Chicago, IL (46,504 apartments)
- Washington, DC (44,823 apartments)
- Atlanta, GA (43,854 apartments)
- Los Angeles Non-CBD, CA (40,193 apartments)
- Boston, MA (38,126 apartments)
- Seattle, WA (37,889 apartments)
These cities have the largest amount of vacant office space, offering the highest potential for new apartment creation. For example, New York (Midtown) alone could create over 78,000 apartments if all vacant office space were converted.
Top Cities by Vacancy Rate (highest % vacant)
- San Francisco, CA (34.7% vacancy)
- Downtown Los Angeles, CA (31.8% vacancy)
- Seattle, WA (37,889 apartments, 30.5% vacancy)
- Austin, TX (21,385 apartments, 29.2% vacancy, +1.2% YoY)
- Minneapolis/St. Paul, MN (28.9% vacancy)
- Fairfield County, CT (27.9% vacancy)
- Phoenix, AZ (27.8% vacancy)
- Westchester County, NY (27.4% vacancy)
- Dallas, TX (26.2% vacancy)
- Cincinnati, OH (25.9% vacancy)
Markets with the highest vacancy rates are experiencing the highest underutilization of office space. San Francisco and Downtown Los Angeles, for example, both have vacancy rates above 30%.
Top Cities by Vacancy Growth (largest YoY increase)
- Southern NH, NH (+5.3% YoY)
- Downtown Los Angeles, CA (+5.0% YoY)
- Seattle, WA (+4.7% YoY)
- Raleigh/Durham, NC (+3.1% YoY)
- Chicago, IL (+3.0% YoY)
- Oakland/East Bay, CA (+2.5% YoY)
- Boston, MA (+2.5% YoY)
- San Jose, CA (+2.3% YoY)
- Dallas, TX (+2.3% YoY)
- Oklahoma City, OK (+2.2% YoY)
These cities are seeing the fastest increases in empty office space, signaling rapidly changing market conditions and emerging opportunities for adaptive reuse.
Implications for Housing and Landlords
Understanding the scale of vacant office space and its potential for conversion into housing is crucial as cities struggle with both surplus commercial real estate and persistent housing shortages. Repurposing empty offices into apartments could help alleviate urban housing crises, stabilize rents, and revitalize downtown neighborhoods, making cities more adaptable to changing work patterns and population needs.
For landlords and debt collectors, these trends carry important implications. The ongoing rise in office vacancies and the shift toward remote work are not happening in isolation; they coincide with mounting financial stress for both renters and property owners.
When tenants fall behind, landlords may be forced to turn to debt collection agencies to recover unpaid rent—a process that can be costly, time-consuming, and legally complex. As more units come online, effective tenant screening and proactive debt management will become even more critical for landlords. Understanding the intersection of real estate trends and debt collection practices is essential for anyone managing or investing in rental properties.
Methodology
This analysis utilizes Q1 2025 office market data for 91 U.S. cities, as reported by Cushman & Wakefield’s national office market report. The following approach was applied for each city:
- The total office inventory (in square feet) and the Q1 2025 vacancy rate were combined to determine the total volume of vacant office space.
- To estimate the potential number of residential units that could be created through office-to-apartment conversions, the average U.S. apartment size of 908 square feet was used, based on RentCafe’s annual report.
- Year-over-year changes in vacancy rates were examined to highlight cities experiencing the fastest growth in office vacancies.
- Cities were ranked across three dimensions: greatest conversion potential (i.e., the highest number of possible apartments), highest current vacancy rate, and largest year-over-year increase in vacancy.
- Both national and city-level patterns were visualized and summarized to offer a comprehensive perspective on the office-to-residential conversion landscape.
This methodology provides a data-driven assessment of the scale and distribution of potential office-to-apartment conversions across major U.S. markets
Data Sources:
- Cushman & Wakefield Q1 2025 National Office Market Report
- RentCafe 2024 Average Apartment Size Report
