Markets & EconomyRentals

Apartment developers target nonresidential buildings

Highest volume of apartment conversion projects will occur in Mid-Atlantic and Great Lakes areas

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The diminishing volume of quality multifamily development sites will influence more developers -- especially local firms -- to target conversion opportunities that involve transforming aging factories, schools, office buildings, warehouses and churches into rental product. A number of these aging buildings are infill-located or in submarkets that have undergone recent gentrification. By saving the core or shell of a building, incorporating existing interior features and obtaining various available tax credits, developers can save money on project costs. Additionally, the time frame for a conversion project is typically shorter -- 12 to 15 months -- than building a new project from the ground up. The highest volume of apartment conversion projects will occur in the Mid-Atlantic and Great Lakes areas. Philadelphia stands apart as one market with a significant pipeline of conversion deals. A century-old church and school was recently approved for a 34-unit apartment conver...