Charlotte tests office-to-residential conversions amid rising vacancy

Key points:

• • Charlotte is testing office-to-residential conversions as vacancy in older buildings rises.
• • Projects face major structural and financial constraints, limiting widespread adoption.
• • Adaptive reuse is gaining traction as part of a broader shift toward mixed-use, higher-density development.

March 2026 — Charlotte is beginning to test whether aging office towers can be repositioned as housing, as elevated vacancy persists across older buildings. The shift reflects growing pressure on legacy office inventory in the city’s urban core.

The most prominent example is the Brooklyn & Church redevelopment. According to a JLL press release, the project will convert a former Duke Energy office tower into about 460 luxury apartments with ground-floor retail. Delivery is expected in 2027. Developers are preserving the structural core of the building and redesigning the façade to accommodate residential units.

“This transformative project will set a new standard for luxury living in Uptown Charlotte,” said Taylor Allison, a member of JLL’s Capital Markets Debt and Equity Advisory team, in a press release.

The project is widely viewed as a test case. It signals how owners may reposition older assets that struggle to compete with newer construction. Similar strategies have gained traction in larger U.S. markets over the past two years. In Washington, D.C., developers are converting two vacant office buildings near Dupont Circle into more than 500 apartments. According to npr, the nation’s capital has delivered roughly 2,000 units through 11 completed conversions since 2024. 

In New York City, the former office tower at 25 Water St. is being redeveloped into about 1,300 apartments, the largest office-to-residential conversion in the United States to date, according to The Architect’s Newspaper. These projects demonstrate how adaptive reuse is being used to address both elevated office vacancy and persistent housing shortages in major urban markets. 

Vacancy pressures older assets

Office vacancy in Uptown remains elevated, with Charlotte’s overall rate reaching about 26% in 2025, according to Charlotte Business Journal. That figure marks a record high. Market participants note it was partly skewed by Vanguard Group vacating more than 565,000 square feet and moving into an owner-occupied campus.

Even with that distortion, vacancy remains well above a balanced market. Large blocks of space returning to inventory have weighed on absorption.

Leasing demand has concentrated in newer, amenity-rich buildings. Class A assets account for the majority of recent deals, particularly in Uptown and South End. Older Class B towers continue to lag and face higher availability.

This gap is driving early conversations around conversion. Market participants say older assets without recent capital investment are the most likely candidates. Buildings that cannot attract new tenants may require alternative uses to retain value.

Even so, conversion activity remains limited. Charlotte trails larger markets where adaptive reuse has already scaled. The current environment reflects more exploration than execution.

Not every building qualifies

Only a small portion of office inventory can realistically convert to residential use. Structural and financial constraints limit feasibility across much of the market.

Buildings must meet several physical criteria. Floor plates need to be narrow enough to allow natural light into units. Window spacing must align with residential layouts. Structural systems must support plumbing and mechanical retrofits across multiple floors.

Many Charlotte towers were developed with large, deep floor plates optimized for office use. Those configurations reduce residential efficiency and often require major structural changes to make units viable.

Economics presents an even larger hurdle. Research from Brookings Institution shows most office conversion projects are not financially feasible without public support. In a national analysis of multiple markets, the majority of buildings studied generated negative returns after accounting for acquisition, construction, and financing costs.

Conversion costs frequently exceed $300 per square foot in many markets. That can rival or surpass ground-up development. As a result, projects depend on a narrow set of conditions, including discounted acquisition, strong residential demand, and, in many cases, tax incentives or subsidies.

Conversion is not a universal solution. It works on a building-by-building basis, shaped by design, market rents, and the availability of policy support.

Suburban sites enter pipeline

Conversion interest is not limited to Uptown. Developers are also evaluating suburban office properties for redevelopment as vacancy rises in older assets.

In Ballantyne, Northwood Ravin has filed plans to convert the Rushmore One office building into a multifamily project. According to the Charlotte Business Journal, the proposal outlines about 411 units across a mix of apartment buildings and townhomes on the 16-acre site.

The property, built in 1997, recently lost its sole tenant after Synchrony Financial relocated to SouthPark. The vacancy has created an opportunity to reposition the site as residential rather than pursue new office tenants.

The project remains in the early planning stages. It reflects a broader shift underway in Ballantyne, where office-heavy development is being rebalanced with housing, retail, and entertainment.

Northwood’s broader Ballantyne Reimagined initiative includes new apartment towers, mixed-use retail, and public space. The strategy aims to transition the area from a traditional office park into a more diversified, walkable district.

This evolution mirrors national trends. Suburban office campuses with excess capacity are increasingly being repositioned to support residential growth and mixed-use environments.

Long-term shift takes shape

Local policy is beginning to align with adaptive reuse. The City of Charlotte Planning, Design & Development Department has emphasized higher-density, mixed-use development through the Charlotte Future 2040 Comprehensive Plan, according to a press release. That plan calls for more housing in employment centers and reinvestment in underutilized commercial areas. The city’s Unified Development Ordinance, implemented in 2023, further supports this approach by allowing more flexible, by-right development in certain districts and reducing zoning barriers for residential and mixed-use projects.

“With the introduction of the Community Area Plans, we are taking significant strides towards realizing Charlotte’s future goals,” Monica Holmes, planning director for the city of Charlotte, said in the January press release. “These plans not only enhance our ability to manage growth effectively but also foster vibrant, resilient neighborhoods that reflect the diverse needs and aspirations of our residents.”

Planning efforts have also focused on streamlining approvals. City officials have prioritized more predictable permitting processes and greater coordination across departments to facilitate redevelopment of existing properties, including aging office buildings.

Want more? Read the Invest: Charlotte report.