Phoenix among cities leading the national office conversion trend Article originally posted on AZ Central on May 4, 2026 The COVID-19 pandemic brought a reckoning to office space, leaving large-scale vacancy in major cities, including Phoenix, where the vacancy rate reached 22.8% in the first quarter of 2026. The move away from office space has left some buildings functionally obsolete, priming them to be converted to a different use, or razed and redeveloped. In Phoenix, about 1,500 apartment units are planned to be created through converting offices to residential use, according to a report from RentCafe, using data from Yardi Matrix. Phoenix ranks 13th in the nation for units planned to be created by converting offices. New York City, which topped the list, has about 16,400 units planned to be created through conversions. Phoenix’s most recognizable office-to-apartment conversion, One Camelback, has been underway since 2019, before the pandemic brought a death knell to many other office buildings. That project was purchased by Kinella Capital at the end of 2025, and could open by the end of the year. The development, on Camelback Road and Central Avenue, will include 163 apartment units and is 11 stories tall. Most of the units were already complete when Kinella Capital bought the building, TK Stratton, founder and CEO of the company, said. The building also has a rooftop pool and amenity deck. Along with One Camelback, a handful of other apartment conversion projects are planned and underway in the Valley. In 2024 Caliber Co. bought an office development on 25th and Dunlap avenues, and in 2025 got approval from the Phoenix City Council to convert the 312,000-square-foot office complex into apartments and develop on a vacant parcel on the site. That project is expected to create 376 apartment units. The development is near the razed Metrocenter Mall, which is also being redeveloped into an “urban village” that will be heavily residential, but will also include retail, restaurants and other uses. Other use types are also considered for conversion into apartments. The Sheraton Crescent hotel, which was damaged in 2023 and never reopened, was bought out of receivership in March and is planned to be converted into 258 apartment units. Three additional apartment buildings are expected to be built on remaining land on the property, located at Interstate 17 and Dunlap Avenue.