Denver’s Office-To-Apartment Pipeline Grows Amid Record National Surge

Denver office buildings are being converted at a higher rate than a year ago, with a 55% increase in converted apartment units set to deliver this year, according to a new RentCafe report. 

Some 1,398 apartment units are set to be converted from former office space this year, up from 900 units in 2024. That makes Denver the country's 15th-largest adaptive reuse market.

The demand for conversions stems from Denver’s struggling office market. Office availability hovered at 30% in the fourth quarter, according to Savills, including direct and sublease availability. 

“The office owners are walking away in Denver,” Doug Ressler, manager of business intelligence at RentCafe’s parent company, Yardi Matrix, told Bisnow. “You have a lot of vacancy. You have valuations that are really taking a hit. So the alternative is what do you do? Do you let it go down to the ground and demolish it? All of that is taken into account in making it profitable again.”

A wave of office-to-apartment conversions is swelling nationwide, with a record 70,700 units expected to be delivered this year.

Office-to-apartment projects account for half of all planned adaptive reuse conversions in Denver, which has 2,741 units in the pipeline.

The other half of planned adaptive reuse projects could include a downtown government building conversion with 51 units and two hotel conversions totaling 376 units, Ressler said. He declined to give specifics, citing proprietary information gleaned from Yardi’s CommercialEdge research.

Hotels are often the more cost-effective option since many already have layouts suited for one-bedroom and studio apartments. But developers must also navigate evolving rules.

“Different building codes change every decade,” Ressler said, pointing to dual stairway requirements as an example.

A Colorado House bill introduced last year challenged state rules requiring two staircases in apartment buildings but ultimately failed under pressure from fire chiefs.

Despite these efforts, conversions remain just a fraction of overall multifamily deliveries.

“Office-to-multifamily conversions have been relatively small … making up approximately 1% of multifamily deliveries over the past 20 years,” Ressler said. “Despite some recent increases in activity, conversions still represent a small fraction of total multifamily completions.”

Ressler pointed to several notable projects leading the conversion charge, including a planned redevelopment submitted by Revesco Properties and Davis Partnership Architects at 475 17th St. that is expected to deliver 210 apartments. The Kistler Stationery Building at 1620 Champa St., meanwhile, would add 585 units, according to plans Apartment Investment and Management Co. submitted.

Looking ahead, Denver has ample space for further conversions.

An estimated 23.6M SF — or 12% of the city’s existing office inventory — is considered viable for future residential redevelopment, according to Yardi Matrix data.