Denver ranks 16th for converting offices to apartments
DENVER (KDVR) — The race continues to build more apartment units across the metro area to accommodate Denver’s growing population.
The plan includes turning old offices and hotels into new homes, and the biggest benefit may be reducing high rent prices.
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A vacancy and rent report for the first quarter of 2024 shows the average monthly rent for Denver is $1,875, a $5 increase from the quarter before.
Renter Matt Flanigan told FOX31 that many of his friends have left the downtown area because of increasing rent prices.
“It’s pretty awful,” he said.
Another renter told FOX31 he fears too many residents are being priced out of areas in the suburbs too.
“We definitely need some cuts soon or we’re going to triple the homeless,” he said.
1,800 converted apartments expected in Denver
Economic experts say the solution comes down to supply and demand. If more apartments are available, the price comes down.
The city and county of Denver released a study funded by the American Rescue Plan that identifies 16 downtown buildings that can be used for residential use.
A RentCafe annual adaptive reuse report shows Denver ranks 16th in the nation for property conversions, shifting 300 units from school and office spaces in 2023. There are plans to add more than 1,800 apartments in the future. A thousand units will be created from office space, which makes up 54% of total future conversions in the city.
But why are so many office properties available now? The company behind the research, Yardi Matrix, told FOX31 it’s because of something called “the great office meltdown.”
“In terms of the work-from-home, people not filling the offices as they did prior to the pandemic starting has really dragged on,” researcher Doug Ressler said.
Renters are drawn to reuse buildings because they can be less expensive and come with amenities like parking and high walkability ratings.
Converting offices to apartments comes with challenges
While industry experts agree that reusing buildings benefits the community, the Apartment Association of Metro Denver warns that conversion has its challenges. The association provided FOX31 with the statement below.
“The transformation of office spaces into residential apartments is a trend that responds to the changing needs of urban areas. Typically, increasing the supply of apartments can help stabilize or potentially lower rent prices by offering more choices to renters,” the statement reads. “However, it is important to note that the conversion process is often more unwieldy and expensive than initially anticipated. We must be realistic about the challenges and costs involved.
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“We observe that these conversions often rejuvenate underutilized spaces, contribute to the vibrancy of the community, and can lead to a more dynamic mix of residential and commercial amenities,” the statement continues. “We support thoughtful development that meets the needs of the community and helps provide affordable housing options.”
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