As demand for luxury apartments continues to grow across the country, developers and builders have begun to delve into unexpected locations for new apartment space — vacant office buildings.
According to the Wall Street Journal, Cleveland is one such city that is seeing new luxury apartments move in to what was once office space. The 21-story East Ohio Gas building downtown, which was once home to some of the city’s biggest companies, is set for a summer reopening as a high-end apartment building.
This type of building re-purposing is taking place all over the country, the Wall Street Journal reports. As a result, the traditional economic relationship between residential and commercial real estate is being turned on its head.
Luxury apartments typically charge higher rents than office space, making them more attractive to landlords. The U.S. office space vacancy rate has also remained high despite the economic recovery of the last few years, and demand for high-end apartments has boomed.
“We are seeing increased demand for residential apartment rentals and transforming existing, underutilized office space is an obvious alternative to the high cost of new construction,” says a Senior Marketing Director at Post Brothers Apartments in Philadelphia.
As housing prices soar in the country’s big population centers, Americans are turning toward renting apartments as a more affordable alternative to buying, according to the New York Times.
“…Across much of California and the Northeast, prices are now high enough that the costs of owning a home – property taxes, repairs, fees to real-estate agents and mortgage interest – may outweigh the financial benefits, including the tax break,” the New York Times article stated.
Research shows that on average, renters save about $560 every month just by renting instead of buying a house. As more Americans see the financial viability of renting an apartment, this trend is likely to continue.