Converting Commercial or Common Space into Residential Units in Maryland: What the Project Actually Involves

What a “Conversion” Means to the Code Official

Owners describe these projects in plain terms: turn the unused second floor into apartments, carve a handful of studio units out of a common area, make the old office suite into three rentals. The building department describes the same project with one phrase — change of occupancy — and that phrase decides most of what the job will cost.

Maryland requires every jurisdiction to enforce the same model codes. As of 2026 the Maryland Building Performance Standards adopt the 2021 International Building Code (IBC), the 2021 International Existing Building Code (IEBC) — Maryland calls it the Building Rehabilitation Code — the 2021 IECC, the 2019 Maryland Accessibility Code, and the 2024 editions of NFPA 1 and NFPA 101 for fire safety. Counties may amend those codes, but only within limits, and Baltimore County, Baltimore City, Howard, Anne Arundel and Carroll all enforce them.

Under the IEBC, converting a space to a new occupancy group — an office (Group B) or an assembly or common area to dwelling units (Group R-2) — means the converted area has to meet the current code for the new use, not the code the building was originally built under. That is the single most important fact about a conversion budget. A building that has been perfectly legal as an office for forty years can need a new sprinkler system, new egress, new fire separations and new accessible routes the day it becomes apartments.

The Items That Move the Number

Fire sprinklers. The IBC requires an automatic sprinkler system throughout buildings containing Group R occupancies, and the IEBC carries that requirement into a change of occupancy. If the building isn’t already sprinklered, plan on an NFPA 13 or 13R system, a fire service line, and often a backflow preventer — with the water supply verified before the design is finalized. Sprinklers are the most common reason a conversion estimate lands a third higher than the owner expected.

Fire separation and sound. Each dwelling unit needs rated separation from its neighbors and from corridors — typically one-hour fire partitions and horizontal assemblies — plus sound-rated construction (STC and IIC ratings) between units. In an existing building this usually means new wall assemblies, new ceiling assemblies below occupied floors, and firestopping at every penetration. It is invisible in the finished product and it is a large share of the framing and drywall budget.

Egress. Two exits, corridor widths, door hardware, emergency lighting, and travel distances are all evaluated against the new occupancy. Second- and third-floor conversions often need a second stair or a rated exit passage that the office layout never required.

Mechanical, electrical and plumbing. Studio units each need a kitchenette, a full bathroom, their own heating and cooling, and usually separate metering. That means new drain, waste and vent stacks; new water distribution; a heavier electrical service and a panel per unit; and exhaust for each bath and kitchen. On a commercial floor the existing infrastructure is almost never in the right place, so the MEP drawings drive both the cost and the schedule.

Accessibility. The Maryland Accessibility Code applies, and in multi-unit residential work the federal Fair Housing Act design standards can apply as well. Accessible route, door clearances, bathroom clear floor space, and adaptable kitchens need to be settled on the plans, not discovered at inspection.

Zoning. Before any building permit, the parcel has to permit the residential use and the unit count. In Baltimore County, a change of use goes through a zoning use permit and a change-of-occupancy permit from the Department of Permits, Approvals and Inspections, which requires floor plans with the application and — for assisted living, healthcare and food-service uses — a separate Environmental Health Services review. Any physical alteration then needs its own building permit on top of the occupancy permit.

What Construction-Ready Drawings Are Worth

The best conversion inquiries we receive say some version of: “we have permits and construction-ready drawings.” That sentence changes the project.

A sealed architectural set with a full MEP package (mechanical, electrical, plumbing and fire protection sheets) means the code analysis has already been done, the sprinkler question has already been answered, and the subcontractors can price from documents rather than from a walk-through. It removes the two largest sources of change orders in conversion work — undiscovered code requirements and unpriced MEP scope.

When the drawings are missing or partial, we build a pro-forma estimate with those items called out as allowances and assumptions, and the first phase of the contract is finishing the design. That is honest, but it is slower, and the number is wider.

What a Change of Occupancy Looks Like in Practice

Our most recent change-of-occupancy project was not residential, but it followed exactly the same rulebook. In 2025 we converted a raw retail bay at the Greenspring Shopping Center in Pikesville into a FastMed urgent care and primary care clinic — mercantile space becoming a healthcare use, inside a shopping center that stayed open around us the entire time.

Almost none of the cost was in what a visitor sees. It was in the new plumbing rough-ins to every exam room, the electrical service and dedicated circuits for diagnostic equipment, the rated separations from the neighboring tenants, the accessible route and restrooms, the mechanical system re-zoned for a clinic’s ventilation, and the county’s environmental-health plan review on top of the building permit. The reception desk, the chandelier, and the murals in the pediatric exam rooms were the last and smallest part of the budget.

Residential conversions distribute their cost the same way, with one difference: the wet rooms multiply. Ten studio units means ten bathrooms and ten kitchenettes, each with its own drain stack, water supply, exhaust, and panel. In this market, once sprinklers, rated assemblies and per-unit mechanical, electrical and plumbing are included, studio and one-bedroom conversions inside existing commercial buildings generally land in the low-to-mid six figures per unit. Where a specific building falls in that range depends on three things: how many wet rooms the plan creates, the condition and capacity of the existing services, and whether the building is occupied during the work.

Two things about that generalize. First, per-unit cost in a conversion is driven by wet rooms and rated assemblies, not by square footage, so small studios are not proportionally cheaper than one-bedrooms. Second, an occupied building adds cost for phasing, dust control, after-hours work and temporary protection that a vacant shell does not carry.

How Prime Builds a Conversion

We run conversions as design-build even when the owner brings drawings. The sequence is the same as our other work: a site walk, a line-by-line pro-forma estimate with allowances and exclusions visible, subcontractor pricing from the actual documents for electrical, plumbing, HVAC and sprinklers, a Maryland-compliant contract, then permitting and construction with job-cost tracking against the estimate.

For occupied buildings — apartments over a business, assisted-living floors, mixed-use — we build the phasing plan into the schedule (our assisted living and memory care renovation guide covers that in detail): which units are closed when, how the corridor stays an exit throughout, and how the existing occupants’ services stay on while new stacks are cut in.

If you are looking at a floor, a wing or a building that would be worth more as residential units, send us the address and whatever drawings exist. We will tell you what the change of occupancy will actually require before anyone talks about a price.

Prime Renovations LLC is an MHIC-licensed (#143153) design-build general contractor based in Baltimore, serving Baltimore City and County, Howard, Anne Arundel and Carroll counties. Call or WhatsApp (410) 260-0070, or use the contact form.