{"id":3626,"date":"2024-09-23T12:03:53","date_gmt":"2024-09-23T12:03:53","guid":{"rendered":"https:\/\/www.commercialsearch.com\/blog\/?p=3626"},"modified":"2025-11-12T11:54:46","modified_gmt":"2025-11-12T11:54:46","slug":"august-office-report-market-stats-rates-sales","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/blog\/august-office-report-market-stats-rates-sales\/","title":{"rendered":"New Study Lists 1.2BSF of U.S. Office Space as Quality Residential Conversions"},"content":{"rendered":"

With remote and hybrid work upending office utilization rates across the country, office property owners are looking at ways to ensure the future profitability of their properties. While that often means adjusting to the flight to quality and upgrading existing properties, interest in converting vacant office buildings into residential units has grown among owners as well as policymakers.<\/p>\n

In this developing context, Yardi Research Data\u00a0has developed a new tool dubbed the Conversion Feasibility Index (CFI), which awards office properties a weighted score based on their feasibility for conversion into residential. The score is based on factors such as building age, location, total square footage, floor plate shape, ceiling height, transit accessibility and more.<\/p>\n

Using this new tool, Yardi Research Data found that 228.3 million square feet of office space \u2014 or 2.7% of existing office stock in the U.S. \u2014 is ranked as Tier I, representing prime office-to-residential conversion candidates. Additionally, another 1 billion square feet of office space \u2014 or 12.1% of stock \u2014 is classed as Tier II, meaning it offers strong conversion potential with some modifications or adjustments. The remainder is made up of Tier III properties, which face significant challenges when it comes to conversions to residential space.<\/p>\n

\u201cWith the continued destruction of office values and as we see an uptick in incentives at different levels of government, we believe the total pool for potential conversions into multifamily is larger than initially expected,\u201d said Peter Kolaczynski, director of Yardi Research Data. \u201cNot a cure-all by any means, but the 1.25 billion square feet identified isn\u2019t insignificant.\u201d<\/p>\n

At a market level, the locations with the largest concentrations of strong conversion candidates include Manhattan (16.8% Tier I and 36.3% Tier II), San Francisco (6.2% and 19.6%), Los Angeles (4.4% and 20.3%), Chicago (4.1% and 14.5%) and Miami (3.7% and 12.4%). These markets have significant office inventories with positive factors for residential conversions. At the same time, housing prices have become more of a challenge in several of these locations, so office-to-multifamily conversions could provide a welcome boost to residential unit inventories.<\/p>\n

Still, Yardi Research Data points out that conversions are still niche, although local governments are doing their best to push such initiatives along.<\/p>\n

National Office Asking Rates Rest at $31.67 as $17.1B Trades Hands in Office Sales YTD<\/h2>\n

The average full-service equivalent listing rate at a national level stood at $31.67 in July, unchanged from the previous month. The office report underscores that Manhattan, San Francisco and the Bay Area were the markets with the highest listing rates at $71.34, $61.38 and $53.71, respectively.<\/p>\n

San Francisco was one of the markets with the largest 12-month drops in asking rates at -4.2%, alongside the Twin Cities (-8.4%), San Diego (-8%) and Los Angeles (-4.6%). At the opposite end of the spectrum, markets experiencing the largest rent growth year-over-year included Miami (5.9%), Dallas (5.2%) and Atlanta (3.9%).<\/p>\n

If you’re looking to lease office space, check out what some of the nation’s most diverse inventories have to offer. Alternatively, start a personalized search from our homepage<\/a> and choose among office spaces based on location, prices, amenities, square footage and other specialized search terms.<\/em><\/p>\n\n\n\n\n\t\n\t\n\t\n\t\n\t\n\t
New York City office spaces for lease<\/a><\/td>Houston office spaces for lease<\/a><\/td>Chicago office spaces for lease<\/a><\/td>\n<\/tr>\n
Manhattan office spaces for lease<\/a><\/td>Austin office spaces for lease<\/a><\/td>Los Angeles office spaces for lease<\/a><\/td>\n<\/tr>\n
San Antonio office spaces for lease<\/a><\/td>Dallas office spaces for lease<\/a><\/td>San Francisco office spaces for lease<\/a><\/td>\n<\/tr>\n
Fort Worth office spaces for lease<\/a><\/td>Phoenix office spaces for lease<\/a><\/td>Miami office spaces for lease<\/a><\/td>\n<\/tr>\n
Portland office spaces for lease<\/a><\/td>Atlanta office spaces for lease<\/a><\/td>Seattle office spaces for lease<\/a><\/td>\n<\/tr>\n
Austin office spaces for lease<\/a><\/td>Boston office spaces for lease<\/a><\/td>Denver office spaces for lease<\/a><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n

Looking at sales, office transactions so far this year total $17.1 billion for an average of $173 per square foot. A large share of this figure is made up by discounted sales: 28% of all office buildings sold this year traded for a lower price than their previously recorded sale, which is up from 18% of buildings sold last year. Manhattan recorded the largest sales volume year-to-date at $2.03 billion, followed by Washington, D.C. with $1.57 billion and the Bay Area\u2019s $1.01 billion.<\/p>\n

For more details, check out CommercialCafe\u2019s national office report<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

As the office market continues to deal with low demand since the widespread adoption of remote work, some building owners are looking toward alternative ways of covering overheads and boosting the profitability of their properties. Conversion into multifamily units has become an increasingly common conversation topic in this context.<\/p>\n","protected":false},"author":71,"featured_media":2530,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[34],"tags":[],"class_list":["post-3626","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-office-reports"],"acf":[],"yoast_head":"\nAugust Office Report: Office to Residential Conversion Potential<\/title>\n<meta name=\"description\" content=\"Over 1 billion square feet of U.S. office space shows potential for office-to-residential conversion, a new office report highlights.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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