Inside a Duluth high school-turned-apartment building

Going back to school isn't easy, but what if there were no classes, unlimited pickleball and views of Lake Superior?

The big picture: Former schools accounted for 3% of U.S. apartment conversions in 2023, data shared with Axios shows.

• Offices and hotels dominate the national conversion trend, comprising 28% and 36% of newly completed projects, according to a RentCafe analysis .

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Why it matters: As cities and developers seek to repurpose empty space into much-needed housing , a mix of building types are on the table.

Zoom in: Some of Minnesota's shuttered schools are already being flipped, including one in Duluth which opened earlier this year.

• Developers also converted a school into apartments in Albert Lea , about 90 miles south of the Twin Cities.

What they're saying: School buildings can offer more of the natural light renters want, compared to offices and brand-new construction , says Mark Laverty, chief development officer at St. Louis Park-based Saturday Properties.

• The Duluth high school -turned-122-unit apartment complex his firm owns was nearly 75% leased ahead of its grand opening in late May, Laverty tells Axios.

Photo: Courtesy of Saturday Properties Photo: Courtesy of Saturday Properties

While turning cafeterias and gyms into homes is easier said than done, state and federal historic preservation tax credits can make them feasible.

• Conversions in general are complex, expensive and often hampered by local building restrictions.

Locker-lined hallways, tall windows and an indoor pickleball court represent some of the draws of living at Zenith DCHS Apartments .

The vibe: "We naturally had these really great corridors and gathering areas," says Alex Haecker, whose Minneapolis-based architecture firm designed the project, which converted Duluth's Richardsonian Romanesque -style Central High School.

• This past week, rents started at $1,265 for a studio, $1,391 for a one-bedroom, $2,199 for a two-bedroom and $2,999 for a three-bedroom.

Data: RentCafe ; Chart: Simran Parwani/Axios

State of play: Several factors contributed to historical jumps in school conversions since 2000, including declining enrollment in some school districts and heightened interest in city living and historic preservation, according to RentCafe.

• The 2008 financial crisis also led more developers to consider repurposing existing buildings like schools to reduce construction costs, research analyst Veronica Grecu tells Axios.

What we're watching: No churches were converted in 2023, per RentCafe's analysis of Yardi Matrix data, though the Twin Cities area has seen some adapted for housing in recent years.