Adaptive reuse and conversion of office to multifamily projects make enticing headlines, especially in Dallas, which ranked fourth by RentCafe for converting old office spaces into multifamily units in its 2025 market insights report. Close to 25,000 apartments were completed in 2024 from adaptive reuse projects across the U.S., up a staggering 50% compared to 2023, according to the report.
In Dallas, 698 units were added from office-to-apartment conversions, including 291 units completed by AP in a multi-year project in the 50-story Santander Tower at 1601 Elm St. in the heart of the historic Dallas Main Street District.
AP began construction on Phase Two of Santander Tower’s Peridot Residences in August 2025. This project will add five floors and 105 one- and two-bedroom residences within this integrated mixed-use development.
In both project phases, AP partnered with Dallas-based multifamily and mixed-use developer, Mintwood Real Estate, and building ownership, Dallas-based Pacific Elm Properties, to convert multiple floors in the 1.4 million-square-foot downtown high-rise tower to 291 multifamily units, along with amenity spaces including an indoor pickleball court.
It is important to recognize that adaptive reuse allows for energy conservation and waste elimination by upcycling existing structures. This reduces the natural resources it would take if the structure were rebuilt entirely. It is also an essential strategy to address cities’ changing needs by converting buildings into other uses ranging from housing to hospitality.
The genesis for a successful conversion project centers on a good location, creative financing, historic preservation tax credits and/or public-private partnerships (PPP). A PPP can truly be the difference between a project happening versus a blighted vacant building sitting there.
Several other key components can make or break a conversion project. For instance, is the building architecturally interesting with the potential to take something underused and turn it into something beautiful and unique? And, is a project feasible? Developers and owners must look at parking options, floor plate layout and existing MEP systems for infill developments such as buying land for a parking lot.
A spirit of stewardship truly impacts what this conversion may mean to a neighborhood. Many developers see the bones of these old buildings and have a vision of what a project could be.
A wonderful illustration of this is the Santander Tower project. As more companies switched to a work-from-home model and needed less office space, Pacific Elm Properties saw the opportunity to partner with multifamily and mixed-use developer, Mintwood, to address the need for housing in downtown by creating something unique and desirable.
And, like many construction projects – whether built from the ground up or a conversion – we encountered challenges that required teamwork, agility and a willingness to pivot as needed. AP learned a lot in the first phase of this project that will make the second phase run more smoothly.
In this case, AP was fortunate that the owner, architect (WDG) and the contractor all sought solutions that were in the best interest of the project outcome, which isn’t always the case. While some adaptive reuse projects start with an empty building, Santander was an active mixed-use property with office, hotel and retail. Working in an occupied mixed-use building meant AP had to install plumbing overnight and that wasn’t the only night and off-hours work. The construction team also had to do demolition work, core-drilling, electrical shutdowns and draining down the building of chilled and domestic water.
“In my opinion, one of the most unique aspects of this conversion project is the quality of relationships between the fantastic AP project staff on-site with our trade partners,” said AP Senior Project Manager Tanner Nichols. “Santander’s second phase is located within a fully functional high-rise structure. Office tenants, hotel occupants, restaurant-goers, etc., cannot be interrupted from their day-to-day activities. This requires significant pre-planning and coordination with a multitude of entities to ensure there are no disruptions. A lot of out-of-the-box thinking takes place to operate this sort of project.”
For instance, vertical transportation was a challenge. Due to the building’s occupancy, AP could only utilize one elevator, which meant one elevator had to transport both the 200-plus workers, along with the materials up and down the 50-floor high-rise daily.
Thankfully, the entire team willingly pivoted and faced the challenges by finding ways to be nimble. At a certain point, the most critical thing is the execution of the vision and not letting other components be a distraction.
From phone lines that ran into closets five floors up to aged and out-of-level slabs, the construction team learned many lessons, especially related to addressing the unexpected. There can also be some great discoveries along the way, such as when a core space demolition uncovered a wide-open floor span in the building’s core that became a pickleball court.
The ideal conversion project happens when there is a perfect storm of multiple components. However, one size does not fit all and not every building can be a successful adaptive reuse. A recent Urban Land Institute article, What’s Old Is New: The Business Case for Urban Adaptive Reuse states that six key components must be present for a project to work, including:
There is some discussion about turning Class B or C buildings into storage facilities or data centers if they have the power capacity. Dallas has a lot of these buildings along I-635. The concept is to avoid sending these buildings into the waste stream and to recycle them for different purposes.
However, you have to consider navigating regulatory or environmental concerns with cities, in particular. Location and costs play chief roles, but it can be challenging to develop an office into industrial or take a suburban tilt-wall three-story office and convert it into something else. Government incentives can help make some of these deals work, but often, they just don’t pencil.
“The adaptive reuse to multifamily conversion at Peridot Residences has been successful with the first phase reaching better than 90% occupancy,” Nichols said. “Not every property will be the right fit for a conversion, but I love the idea of it. With the amount of sprawl that has occurred in the DFW Metroplex, moving farther away from the city is becoming a less viable option for families and/or companies that need to be centralized in the Dallas or Fort Worth areas. Adaptive reuse can be the answer to bring people and companies back into the inner city, although not every building will have that ability to adapt.”
Development may be spurred by stabilizing construction costs, along with continued interest rate cuts by the Fed. But value-add is central to real estate and at the end of the day, adaptive reuse is a value-add.
While it is tempting to continue moving outward from the city and building on a greenfield 30 miles away from the core, in these situations, developers often ignore the potential benefits of existing infrastructure, parking and roads that don’t have to be built.
It is critical to balance innovation, efficiency and history and give aging spaces a new lease on life. The most successful conversions exist in high-density products in locations where people want to be. A successful adaptive reuse project requires a combination of careful planning, community engagement and a strong financial framework.
Key factors include understanding the building’s existing character and structural condition, along with designing flexibly to integrate modern systems into older construction. Additionally, having a comprehensive business plan that considers funding and potential challenges like hazardous materials or complex zoning laws. Ultimately, a successful project balances preserving the building’s history with creating a viable and sustainable future for it.
“The Metroplex has been facing the challenges of large blocks of vacant office space lingering in downtown Dallas,” Nichols said. “By having the right people involved on the front end of a project like the Peridot Residences, an owner/developer can weigh the pros and cons of a multifamily adaptive reuse option and determine if this is a smart investment. At Santander Tower, this has been the best of all worlds.”
