The past five years have been transitional for the downtown apartment market as flexible work arrangements and lifestyle changes have caused people to rethink where they want to live. Developers have followed suit, shifting their focus from bustling downtown areas to outlying areas, according to a RentCafe analysis.
The study showed that these areas have been slowly losing momentum in apartment construction. Since 2020, less than 35% of new apartment completions have been in core places, down from 39% before the pandemic. Adaptive reuse projects have dropped from 10% of downtown builds to only 6% today, according to RentCafe.
Downtown apartment construction appeared to first peak in 2019, with 44% of all new rentals added that year, while adaptive reuse projects were most popular in the late 1990s and 2000s, when they made up 16% of all new apartments in downtown areas.
But downtown living still has a lot to offer for those who enjoy walkable streets, as well as easy access to dining and entertainment, according to the report. Washington, D.C., has added the most downtown apartments between 2020 and 2024 at nearly 23,000 units. Additionally, Manhattan, Milwaukee, Detroit and Kansas City each have notably added a significant share through adaptive reuse projects.
In the nation's capital, new downtown apartments accounted for 80% of completions, with 7.3% coming from adaptive reuse projects. Downtown apartment construction began surging in D.C. during the previous decade, when it made up 75% of all new housing stock. The city’s Downtown Action Plan could spur office repurposing projects to revive areas that have not fully recovered from the pandemic.
Following Washington, D.C., is Chicago, which added 13,901 downtown apartments since 2020, about 63.3% of citywide completions. Adaptive reuse projects account for 5.4% of completions, which is about half what it was in the previous decade. Despite high demand in the Windy City, developers have been hesitant due to high construction costs and interest rates.
Denver ranked third on the list of markets that have added the most downtown apartments since 2020, with 13,149, about 48% of the city’s completions. Denver’s share of adaptive reuse apartments is 5.5%, an increase from only 1.6% between 2010 and 2019. The metro is gearing up for a new stage in its downtown revitalization plan after recently authorizing nearly $600 million in city bonds for the Denver Downtown Development Authority to finance investments in housing, neighborhood amenities, parks, public spaces and more.
Up next is Atlanta, with 11,130 added since 2020, representing about 35.3% of citywide completions. Only 1.5% of apartments are from adaptive reuse projects, down from 7.5% between 2010 and 2019. The city’s downtown area is being fueled by investments in infrastructure and a growing local tech and manufacturing sector.
Charlotte placed fifth on the list, with 11,031 downtown apartments added since 2020, about 30% of the city’s new stock. None of Raleigh’s downtown construction has come from adaptive reuse, although several reuse projects are underway in Uptown Charlotte, including a $250 million transformation of a 1970s office tower into an apartment building with shopping spaces.
Rounding out the top 10 markets for downtown apartment construction since 2020 are Miami, Seattle, Nashville, Philadelphia and Columbus, Ohio.
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