Converting empty offices into hotels is a more profitable solution than creating housing.

In the 13th arrondissement of Paris, the real estate company Covivio is currently converting a five-story office building, with a yellow facade dating from the 1970s, into a 400-bed youth hostel with a green courtyard and a modern facade.

The real estate company has three other transformation projects in Ile-de-France, including high-end hotels.

To find a future for office buildings that are too old or poorly located, "conversion into a hotel has emerged as the most profitable solution, compared to converting them into housing or keeping them as office buildings," Christophe Kullmann, CEO of Covivio, told AFP in February.

Among its offices deemed to be of little value, Icade, the real estate subsidiary of Caisse des dépôts, has rehabilitated four spaces into hotels, and only one into housing.

Hotels are also among the options for modernizing the La Défense business district: a study presented Wednesday at the Mipim real estate fair in Cannes proposes transforming 20.000 to 70.000 m³ of empty offices into hotels, out of the 220.000 to 456.000 m³ of space to be converted.

Irène Fossé, director of research and strategy at real estate fund manager AEW, sees "an acceleration of office-to-hotel conversion projects" and a real "enthusiasm in the real estate market" for the hotel sector.

"There is still excellent demand in Paris" for hotels, explains the head of Covivio, who has also decided to invest more and more in the sector by buying up hotels.

Still too expensive

The main problem in converting offices into housing is the thickness of the building, often 18 meters wide, which does not allow for rooms to be sufficiently lit by daylight in the center of the building.

"Building a hotel eliminates the need for depth, because the rooms have a window and a central corridor," which doesn't require natural light, architect and engineer Franck Boutté explained to AFP. The other technically straightforward option is to create a student residence, whose spatial organization is similar to that of a hotel.

It is also easier to convert an office into a hotel than into housing, due to the more complex administrative processes, points out Christophe Nadal, CEO of Mimco, real estate investor and manager.

His company is converting two Parisian office buildings and another in Lisbon into hotel residences.

But it is primarily on the financial side that housing creation can be problematic. Renovation costs on average 30% more than new construction, according to professionals, which is difficult to recoup with residential rental income.

In this overall cost, the purchase price of the pre-existing building weighs heavily and is sometimes no longer suited to market realities.

The value of an office building depends on the rent at which it can be leased to a company. Therefore, if a building is unattractive, outdated, or poorly located, its value drops drastically by "50%, 60%, or even 80%", according to Nicolas Verdillon, investment director for France at the commercial real estate advisor CBRE.

At the end of 2025, 6,2 million cubic meters of office space were vacant in the Île-de-France region, reflecting a reduced need for office space compared to the pre-Covid period. According to Astrid Weill, CEO of Groupama Immobilier, "there is a 30% surplus of office space" in France.

In this crisis-stricken market, the decline in prices for vacant offices is "well underway but not yet complete," according to Nicolas Verdillon. Some owners prefer to leave the building empty, not sell it, and wait for the crisis to pass.

By proposing a hotel project, Christophe Nadal, of Mimco, can "position himself on the purchase of empty office buildings by meeting the expectations of sellers" in terms of price.