Learn Spanish (Latin America): Ese edificio residencial se transformó en un espacio cultural. - That residential building transformed into a cultural space.

We use the reflexive pronoun se here to show that the building underwent the change itself (it "transformed itself"). If you drop the se, the verb transformar means to transform something else (for example, if an architect transformed the building).

Could I say se convirtió en instead of se transformó en here?

Absolutely. For profound, radical, or physical changes, like a building completely changing its primary function, transformarse en and convertirse en are entirely interchangeable.

Does transformarse always use the preposition en to mean "into"?

Yes. Whenever you state the new noun that the subject becomes, both transformarse and convertirse must be followed by en, never by a or hacia.

As a quick refresher, why do we use Ese here instead of Eso for "That building"?

Ese is the masculine singular adjective that matches the noun it modifies (edificio). The word Eso is a neuter pronoun used only for abstract ideas, previous statements, or unknown objects, and it is never placed directly in front of a noun.