The office-to-multifamily conversion pipeline has broken records again this year, with 71,000 units in progress at the beginning of 2025, according to a new RentCafe report. 

While the pipeline has grown by 28% over the past year, the report notes that many of the units in progress have been carried over from the previous year. Out of the 55,339 units underway at the start of 2024, only 3,709 were completed that year, leaving a 51,630-unit overlap between 2024 and 2025. 

Office projects have expanded almost sevenfold in the past four years, up from 12,100 units in 2021. They now make up 42% of the overall 169,000-unit adaptive reuse pipeline, the largest share out of all conversion types, compared to 38% last year. 

RentCafe attributes this expansion to rising office vacancy rates, as well as stagnating rents and falling commercial property values. At the same time, a shortage of apartments and intense competition has created a greater demand for new apartments. 

“More than just creating housing, this trend reflects a shift toward sustainable, community-focused urban spaces that cater to the evolving lifestyles and priorities of modern American cities,” the report reads.

In a reversal from last year, New York City is the leading location for office-to-multifamily conversions, with 8,310 units in its pipeline, up from 5,215 last year. Washington, D.C., last year’s leader, has 6,533 in progress, up from 5,820 in 2024.

Many major cities are offering financial incentives and removing roadblocks for developers to streamline the conversion process, according to RentCafe. In New York City, converted buildings with at least a 25% affordable component can qualify for tax exemptions of up to 90%. Washington, D.C., provides 20-year tax abatements for conversions within its borders. Minneapolis has removed public hearing requirements for these projects, while San Francisco has updated its building codes and created a special financing district to support them.