Adaptive reuse is when a commercial property is converted and repurposed. The real estate industry has embraced a growing number of these projects. Following the coronavirus pandemic, many commercial properties were rendered obsolete. The trend of converting these spaces to much-needed multifamily units began, with office-to-apartment conversion projects leading the way.
Retail commercial space has also seen its share of adaptive reuse. Turning vacant “big box” stores and other storefronts into apartment homes comes with its own unique challenges. Developers tap into creative approaches to reimagine retail as residential units.
Malls Find New Life as Modern Apartments
Would you like to live in a mall? How about in a former mall space? In many U.S. markets, the concept of a large, indoor mall is anywhere from dated to fully passé. The pandemic alone isn’t to blame. Consider online shopping and how it revolutionized the consumer experience.
Commercial real estate (CRE) is ever in pursuit of a property’s highest and best use. Couple that with a housing crisis, and projects like converting a veritable ghost town, vacant mall to residential use make sense.
In a late 2025 interview with Fox Business News, Hannah Jones, Realtor.com's senior economic research analyst, said, "Mall-to-housing conversions represent a creative way to utilize existing infrastructure to add supply in tight housing markets, but cost and design challenges mean they’re not a silver bullet for affordability."
Nevertheless, these property conversions grow.
Developers may face zoning and environmental challenges, but a mall’s size, available parking, and location are usually in a project’s favor. In late 2024, Forbes and CNBC reported more than 190 mall-to-residential conversion projects were taking place nationwide. Often the conversion is more than just residential, with many ending up as mixed-use projects.
Florida-based general contractor/developer JeBailey & Co. says old malls may be converted into “cleverly designed residential lofts, apartments, or condos.” These projects, whether fully residential or mixed use, “create positive economic value within the community.”
RCLCO, a Maryland real estate economics, research, and consulting firm, shares Plankinton Clover Apartments in downtown Milwaukee, Wisconsin, as an example of “converting former storefronts in a larger mall into contemporary rental units.”
Decades before it became apartments, the Grand Avenue Mall had more than 80 commercial tenants. The property eventually went the way of many 1980s-era American malls. Ownership changed multiple times during its decline. All that changed when Hempel Real Estate purchased Grand Avenue.
RCLCO reports Hempel’s plans for the property included “a 52-unit apartment conversion of the original Plankinton Arcade on the mall’s first two floors.” The pet-friendly apartments opened in 2019, and enjoy a host of amenities including (of course) a doggy wellness area—an indoor play space, (human) fitness center, indoor Pickleball courts, connected parking garage, and much more.
"The conversion to contemporary apartments took advantage of the previous tenants’ 12-foot high ceilings, and traditional retail entryways have become 'private veranda' in select units," shares RCLCO. What an inventive reuse of existing space!
Big Box Stores: Untapped Potential for Housing
Large, vacant chain stores are also candidates for creative conversions. Omgivning is an architecture and interior design firm in Los Angeles. They share that these big, empty retail locations, including their parking lots, “represent extraordinary opportunities for reuse.”
The firm published “Reimagining Spaces: A Post-Pandemic Design Report,” coining the unique phrase, “Urban Reprogramming.” In the study, Omgivning outlined four themes specific to these retail-to-residential converts.
Theme 1: Prioritize Human-Centered DesignTheme 2: Flexibility & Adaptability are Now Crucial to SuccessTheme 3: Beyond Mixed Use: Blended UsesTheme 4: A Space is Inextricable from its Economic Context
Using Los Angeles as its focus area, the analysis covered potential reuse of strip mall shopping centers into affordable residential units. It explored converting big box retail to townhomes. It even covered urban first floor commercial space residential conversion options—perhaps the most challenging of these.
They share a couple of redevelopment case studies. The first explores the potential of a Costco; it’s approximately 150,000 square feet, and adjacent parking of nearly 12 acres.
Omgivning proposes reusing “the structure’s shell through the creation of two-story townhome-style residential units. To maximize the density of residential units while providing access to natural light and ventilation, we propose two communal courtyards at the center of the existing shell.”
Greenspace, a pool, and paths would become gathering places for residents. The yield of this conversion would be around 110 units sized from approximately 1,200 to 1,600 square feet, plus private patios. Commercial uses would include a restaurant and supermarket, among others central to the needs of residents.
Acknowledging that the pandemic ushered in a new era of space design, Omgivning has embraced reimagining commercial space as the needs of the market dictate. Another example they shared focused on mixing new construction with nearby retail shells of Toys “R” Us and Best Buy converted to multifamily units “to further densify the site.”
Repurposing parking lots—significant in size for most large retailers—is also part of these projects. In this case, acres of parking are reworked for community benefit, including as green space for both residents and the public, complete with athletic fields, sports courts, a park, and even a community farming area.
Hotels Join the Conversion Movement
It would be remiss not to mention hotels among the numerous retail-to-multifamily CRE conversions taking place. In fact, Multifamilydive.com and RentCafe reported that, in terms of units delivered at year-end 2023, hotels/hospitality properties constituted the majority of these adaptive reuse projects—the first time in 11 years more apartments were converted from hotels versus office space!
Once again, unfortunately, the movement points to the pandemic as the impetus for the change. Less travel during that time negatively affected the industry.
“The majority of hotel-to-multifamily conversion projects, 60%, came from class B hotels in 2023,” the website reports. Not surprising considering these older, dated locations were hit harder during that time, the site states.
Technology Driving the Next Wave of Conversions
Real estate technology company Ori uses “proprietary robotic systems to make apartments live larger and rent for less, enabling developers and owners to create high-performing multifamily housing, while residents enjoy modern, flexible homes that feel significantly larger than their footprint.”
Ori took a look at hotel-to-multifamily conversions, observing “the trend of converting hotels into apartments is born from both necessity and opportunity.”
The company helps developers maximize repurposing hotel rooms using innovative, multifunctional designs, limiting the construction required and accelerating the timeline to convert former hotel rooms to apartments. One example is an elevated bed that can be moved as needed for use, down at night to sleep or raised and even hidden in the ceiling during the day, revealing access to a sofa. It’s the modern alternative to the age-old Murphy bed or wall bed.
The transition is seamless. The technology is impressive. The transformation is worth seeing. Ori says it has the power to convert even a studio apartment into a multipurpose space. In a word, it is cool!
Atrium Property Management in Florida shares a hotel-to-multifamily project they now manage. In the Orlando area, not far from Disney World, Champions World Resort, a 435-room hotel was transformed into just over 350 multifamily “micro-units.”
At a cost of approximately $14 million, the project converted the hotel to approximately 230 studios and 120 one-bedroom apartments.
Atrium notes conversions like these are found in tourist areas, like Kissimmee, Florida, where housing demand is on the rise. Attractions like Universal Studios have a cadre of employees in need of affordable housing. These projects are good solutions.
Creativity, innovation, great design, and cutting-edge technology are all important in the work of adaptive reuse. An old strip center, an abandoned mall, or a forgotten hotel can all find new life with the promise of residential real estate conversions.
