More old offices are being remade for other uses than ever before. A record 73 office conversions have been completed this year, with another 30 in the works that should be finished this year or next.

CBRE, a large commercial real estate services and investment firm based in Dallas, said that’s the highest level of office conversions in its tracking that goes back about a decade. And the vast majority of the empty office buildings are being turned into multifamily units — apartments and condos.

As of the third quarter, 71 million square feet, or 1.7% of U.S. office inventory, was planned for or already undergoing conversion.

Empty office buildings are also being turned into hotels, industrial space, science labs, shops, schools and more.

The downtown office vacancy rate varies greatly by market, of course. But the national average is about 19%, up from about 12% before the pandemic.

“So, we are pretty elevated,” said Julie Whelan, global head of occupier thought leadership at CBRE. “But that 19% isn’t even really telling, because you really need to look down at the market level. In many downtown markets, you are 200 basis points above that.”

She said downtown San Francisco has a vacancy rate of 35%, for example.

More office space is sitting empty with the rise of remote working, which really took off during the pandemic.

Whelan said they expect another strong year of office conversions in 2025, probably on par with this year, and most office conversions start with a sale and a new owner looking for the best return on their investment.

“They are really just trying to figure out what is the highest and best use in this particular microdistrict of the market to make me the most money. And in some cases, there is a need for upgraded office. … However, multifamily right now is less risky,” she said. “There is more multifamily that’s needed. And it is the No. 1 most preferred asset class from a U.S. commercial investment standpoint.”

The overall downtown multifamily vacancy rate is only about 5%, compared to the 19% for office space. And multifamily rents are rising faster than office rents, according to CBRE.

Cleveland is the top market for conversions, followed by Cincinnati; Fairfield County, Connecticut; New Jersey; San Francisco; Phoenix; Houston; Minneapolis; Washington, D.C.; and Dallas.

Nearly 12% of Cleveland’s total office inventory is either undergoing or planned for conversion.

Whelan said office conversions can be an important part of downtown or neighborhood revitalizations. Vibrant mixed-use districts with newly constructed office space, good places to live and walkable stores and amenities are outperforming comparable city districts, Whelan said.

Such places can keep foot traffic up all week and not see economic activity fall off after traditional office hours.

“There’s a realization now that cities need to be reinvented in a way that supports people living in them more,” she said.

Have a news tip? Contact Cory Smith at corysmith@sbgtv.com or at x.com/Cory_L_Smith.