By Franco Faraudo
– Editor, Propmodo
Nov. 13, 2025
Office-to-residential conversions have become the poster child for adaptive reuse in commercial real estate, but success stories are still the exception. Many office buildings are too deep, too costly, or too regulated to make the numbers work. Yet, as data tools get more sophisticated, developers are starting to use analytics to narrow down which buildings—and which cities—actually make sense for transformation. According to Adam Siegel, VP of Product Growth at Crexi, the difference often comes down to location, land use, and timing.
“Land scarcity is really important,” Siegel said. “Certain cities like LA and New York only have so much space and housing prices are really high. Those tend to be better candidates for conversions than places like Dallas where there is plenty of space to build new multifamily buildings.” The logic is simple: in cities with constrained land and high barriers to new development, the math of converting an existing office often pencils out better than in cities with abundant space and cheaper construction costs. It’s no coincidence that the most notable conversion projects are in New York, San Francisco, and Los Angeles—markets where housing demand is insatiable and zoning reform has started to open new pathways for reuse.
Beyond city-level trends, identifying viable conversion candidates requires a more granular view of the property itself and what the city will actually allow on the site. “First I look for the land coverage. How many units will I be able to get with the land,” Siegel said. “This doesn’t always come out in the data. You have to know what cities want.” Some cities, for instance, are encouraging conversions only within specific downtown districts, while others are adjusting zoning rules to include parking reductions or density bonuses to make projects financially feasible. Understanding the limits of what’s permitted—both on paper and in practice—can make or break a deal.
Crexi is now working to overlay “permittable use” data directly onto its property maps, helping investors visualize which parcels might qualify for adaptive reuse. The goal, Siegel explained, is to bridge the gap between static property listings and the evolving regulatory landscape that governs what can actually be built. Still, he said, there’s no substitute for talking to local officials. “Economic development departments often have certain areas in a city that they are particularly keen on changing,” he said. “It’s important to have some contact with them.” Cities frequently have economic zones or pilot programs for redevelopment that can include incentives, fee waivers, or faster permitting. Having access to that insight early can be as valuable as the building data itself.
While much of the focus has been on downtown high-rises, suburban conversions are quietly emerging as one of the more promising opportunities. “It is hard to take a large office tower and repurpose it,” Siegel said. “But some of the suburban, low-rise buildings are really good candidates.” These properties are often newer, easier to reconfigure, and located in areas already zoned for mixed-use or near existing residential communities. With hybrid work keeping suburban office vacancy rates high—CBRE reported national suburban office vacancy at nearly 20 percent this year—these properties can offer a more straightforward path to creating much-needed housing.
But even in the suburbs, not every office is a good candidate. Developers are learning to look for properties that might not make sense for office tenants but would make ideal housing sites. Access to good schools, transit, and retail can turn an underused corporate park into a viable residential neighborhood. “School district is really important, but it’s a moving target,” Siegel said. “As areas gentrify, they start to get better school districts.” In that way, demographic and educational data are becoming as critical to underwriting conversions as floor plates and zoning codes.
Interest in office conversions is spreading quickly among private investors and family offices, but the goals behind each deal can vary. Some groups are looking for a quick turnaround to capitalize on incentives, while others are planning for long-term holds. “The hold period is really important,” Siegel said. “A lot of private investors look at these as long-term investments that they don’t plan on selling.” For these players, stable cash flow and appreciation potential often outweigh short-term yield, especially if the conversion aligns with broader urban redevelopment plans.
Data is making all of this easier. Layering building characteristics, zoning information, school districts, and local incentives creates a more complete picture of where conversions can thrive. That intelligence can save developers months of due diligence and millions in potential missteps. But the data only goes so far—local relationships, regulatory awareness, and timing still play decisive roles.
As cities continue to rethink their downtowns and developers hunt for new sources of housing supply, data-driven decision-making could separate the winners from the rest. The office-to-residential movement will not be solved by a spreadsheet alone, but the ability to see where land scarcity, zoning flexibility, and market demand intersect might finally make this once-niche strategy scalable. The next great conversion opportunity may not be in a famous skyline but hidden in the layers of data showing where people want to live, not where they used to work.
By Franco Faraudo
Editor, Propmodo
Franco Faraudo has an MBA in entrepreneurship and has worked with a wide spectrum of technology and real estate organizations on their branding and content strategy. He has worked in real estate as an agent, manager, and investor. He writes about the intersection between the physical and digital world and is Co-founder and Editor of Propmodo.
