Three Buildings, One Housing Shortage
Adaptive reuse has become one of the main ways cities are adding housing. RentCafe's numbers show offices make up about 47 percent of the apartment conversion pipeline heading into 2026, hotels about 18 percent, and industrial and other buildings the rest. But the share of the pipeline does not tell you which building is easiest to convert. Each type comes with its own strengths and its own deal-killers.
Office Buildings: Big Potential, Big Problems
Empty offices are everywhere, which is why they lead the pipeline. But office floors were designed for desks, not bedrooms. Deep floor plates leave interior space far from any window. Plumbing is concentrated in a core of shared restrooms, so every unit needs new supply and drain lines. Many office towers have sealed windows.
That makes office conversions expensive. A 2025 Pew and Gensler study of a Houston office tower put a conventional apartment conversion at about $325,000 per unit. Projects work best in older, narrower buildings with operable windows, and many need tax incentives to pencil out. Our deep dive on office-to-apartment conversions covers the details, and the office to apartments guide walks through the process.
- Best for: downtown housing in large numbers
- Biggest hurdle: light, plumbing, and floor depth
- Typical timeline: often two years or more
Motels and Hotels: The Fast, Cheap Option
A motel is close to housing already. Every room has a bathroom, a window, an entry door, and its own heating and cooling. The main additions are kitchens, sprinklers, more electrical capacity, and code upgrades. California's Homekey program averaged roughly $130,000 to $148,000 per unit including acquisition, and many units were occupied within months.
The trade-off is unit size and location. Most motel units are studios of 250 to 330 square feet, and many motels sit on highway frontage rather than in walkable neighborhoods. See our motel conversion overview and the motel cost breakdown for the full picture.
- Best for: affordable and workforce studios, supportive housing
- Biggest hurdle: sprinklers, electrical, and zoning
- Typical timeline: about one year from purchase to lease-up
Retail and Big-Box Stores: Space Without Windows
Dead strip malls and big-box stores sit on huge parcels with lots of parking and often good road access. The buildings themselves are hard to turn into apartments. A big-box store is a deep, windowless box, so most residential projects either cut light wells into the roof or tear down and build new on the site. That is why many big-box buildings are reused for things that do not need daylight, like self-storage, while the parking lots get new apartment buildings.
Strip-center redevelopment is popular in places with laws allowing housing on commercial land, such as California's AB 2011, but it often looks more like new construction than conversion.
- Best for: mixed-use redevelopment of large sites
- Biggest hurdle: no windows, deep floor plates
- Typical timeline: similar to new construction
Side-by-Side Comparison
Cost per unit: motels are lowest, offices are often highest, and retail depends on how much is torn down.
Speed: motels are fastest because the units already exist. Offices and retail sites take longer.
Unit type: motels produce studios and some one-bedrooms. Offices can produce a full mix including two-bedrooms. Retail sites usually become new buildings with any mix.
Location: offices are usually downtown, motels along highways and commercial corridors, and retail in suburbs.
Scale: a motel adds 20 to 100 units, an office tower can add hundreds, and a big retail site can add hundreds more.
What About Churches and Schools?
Smaller building types are joining the trend. Churches, schools, and old mills often have high ceilings and character that renters love, but they come with odd layouts and sometimes historic restrictions. The church to apartments guide covers one of the more unusual paths.
Which One Is Right for You?
For a smaller investor or a nonprofit housing group, the motel is usually the most realistic entry point. The price is lower, the work is repetitive, and the timeline is short. Office conversions suit developers with deep pockets and access to incentives. Retail sites suit those comfortable with ground-up construction. In every case, the deal is won or lost on the code, the utilities, and the true unit count, not the building's size.
Related Reading
- Motel Conversion Permits: Zoning, Change of Occupancy, and Sprinklers
- How to Design a 300-Square-Foot Studio That Works
- How Much Does Every Type of Conversion Cost?
Start with the motel to studio apartments guide, and compare project budgets with the cost calculator.