L.A. Greenlights Office-to-Resi Conversions Citywide, Unlocking Thousands of Units

Key Points

• Los Angeles has adopted a Citywide Adaptive Reuse Ordinance, allowing commercial buildings as new as 15 years old to convert to housing.
• More than 50 million square feet of vacant office space could now qualify.
• Developers like Garrett Lee of Jamison Properties are already converting major office towers into apartments.

What Just Changed

Los Angeles has dramatically expanded its adaptive reuse rules, making it significantly easier to convert underused office, retail, industrial buildings and even parking garages into residential units. Unlike the 1999 ordinance that focused largely on pre 1975 buildings downtown, the new rules apply citywide and include structures just 15 years old. Projects that meet guidelines can now receive administrative approval, bypassing lengthy City Council reviews and environmental impact studies.For developers, that reduction in entitlement risk materially improves feasibility.

Projects Already Moving

Jamison Properties has begun converting a high rise near Downtown L.A. into nearly 700 apartments. Meanwhile, David Tedesco of IMT Residential plans to convert the former Sunkist headquarters in Sherman Oaks into 95 apartments. Under the prior ordinance, Sherman Oaks would not have qualified. Now, corridors like Wilshire Boulevard, Ventura Boulevard, Westwood, South L.A., and the Harbor District are eligible.

Why It Matters for Investors

L.A. has more than 50 million square feet of vacant office space, and traditional office demand remains soft. The new ordinance effectively creates a new supply pipeline without ground-up construction, allowing owners to repurpose stranded assets.

Key considerations:

• Reduced entitlement timelines improve underwriting certainty
• Newer buildings may avoid costly seismic retrofits
• Conversions can increase density by redesigning floorplates for smaller units

However, risks remain. High interest rates, elevated construction costs, labor shortages, and Measure ULA transfer taxes continue to pressure pro formas. Median metro rents recently dipped to $2,167, creating additional caution around projected returns.

The Bigger Picture

Other cities such as New York, Washington, San Francisco, and Chicago have paired conversion policies with financial incentives like tax abatements and transfer tax exemptions. Los Angeles has streamlined approvals but has not yet added significant financial carrots. Still, the ordinance “unlocks the potential” of thousands of underutilized buildings across the city.

The Takeaway

Los Angeles just turned vacant office space into a housing opportunity set. For landlords holding distressed or underperforming commercial assets, the new adaptive reuse rules offer a clear exit strategy or repositioning path. If capital markets cooperate, officeto resi conversions could become one of L.A.’s largest near term apartment supply drivers