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In a previous piece, we examined how office conversion projects are affecting the office market by removing obsolete space from inventory. But office conversions do not simply reduce office stock. They also add supply to other property sectors, with varying implications for those markets.
This article examines what converted office space is becoming and whether those additions are large enough to influence market fundamentals in the two largest end-use asset classes: multifamily and life sciences.
“The most converted asset class wasn’t the most affected one.”
Multifamily Leads the Office Conversion Pipeline While Life Sciences Stall
Office-to-multifamily conversions garner the most headlines, which is not particularly surprising given the post-pandemic disruption to office demand alongside a persistent housing shortage. However, office space is being converted into other property types too. The following chart shows the total square footage of office conversion projects by resulting asset class. The blue portion of each bar shows the square footage of conversions completed since 2020, the green portion shows projects underway (as of mid-2025), and the orange portion shows space planned for conversion, but not yet underway. The cumulative height of each bar represents the total of completed, underway, and planned or announced conversion activity.
Multifamily leads in terms of both completed space and space either underway or announced. Life sciences ranks second in total space converted, underway, or announced, at 20 million square feet. However, unlike multifamily, this total is almost entirely due to completed conversions, as there are essentially no new life science conversions either planned or underway. Multifamily conversions continue to move forward, while life science conversions have largely hit a wall.
Multifamily Conversions Remain Small Relative to New Construction
Despite multifamily accounting for the substantial majority of converted office space, those additions pale in comparison to new multifamily construction. The blue bars in the chart below compare the quantity of office-to-multifamily conversions with new construction in terms of units. There are approximately 16,000 units of conversions underway. When factoring in announced but not yet commenced office-to-multifamily conversions, that number grows to roughly 90,000 units. Considering there are roughly 670,000 units of new apartments under construction, the amount of office-to-multifamily conversations are relatively small. Even all the office-to-multifamily conversions completed since 2020, approximately 27,000 units, only represent roughly 4 percent of new construction currently underway.
The green diamonds show these quantities compared to total multifamily inventory. Currently, new construction is equivalent to approximately 2.9 percent of outstanding inventory. By comparison, all conversions underway and announced amount to just 0.4 percent. All office-to-multifamily conversions since 2020 accounted for roughly 0.1 percent of outstanding multifamily inventory at the beginning of 2020. These small numbers help explain why, despite being the most common type of office adaptive reuse and receiving by far the most media attention, converted apartments have not materially altered multifamily market fundamentals and are unlikely to do so in the future.
The Life Science Market Took a Much Bigger Hit
Unlike multifamily, the life science market has been significantly impacted by recently converted space. During the COVID-19 pandemic, demand for lab space surged, driven in part by vaccine research. Combined with low interest rates, that demand fueled a construction boom that saturated the life sciences market with vacant space. Today, the life science property market is suffering from substantial oversupply, with vacancy rates at 23 percent compared with an industry-estimated office vacancy rate of approximately 16 percent.
Since 2020, 18 million square feet of office space has been converted to life science use, equivalent to approximately 12 percent of life science inventory outstanding at the beginning of 2020.
The End of the Life Science Conversion Wave
In the first quarter of 2022, as the life science boom was taking off, more than one-third of life science space under construction came from conversions. By the peak of the boom in the second quarter of 2023, that figure had retreated to 24 percent, but remained far larger than the share represented by multifamily conversions. Today, life science conversions have all but stopped, and new construction has slowed significantly. The demand outlook for life science space remains uncertain. Debate continues over the extent to which the sector is exposed to broader office markets trends and whether advances in AI could reduce the amount of lab space needed to conduct research.
Most Converted Wasn’t the Most Affected
Multifamily and life sciences emerged as the two largest end-use types for office conversions in the post-pandemic era, but their experiences diverged sharply. While multifamily continues to attract new conversion activity, the pipeline for life science conversions has largely dried up amid weakening demand and elevated vacancy. The supply overhang in life sciences is much greater than in multifamily, and office-to-life-science conversions contributed far more to that oversupply than office-to-multifamily conversions contributed to multifamily supply growth. Though office-to-multifamily conversions have regularly made headlines, office-to life-science conversions had a greater impact on the fundamentals for the end-use asset class. The most converted asset class wasn’t the most affected one.