Concern about the future of the office market and to what degree properties might lose even more value than they have is understandable. Many owners and investors will ultimately take the hit so long as companies don't see the need to have everyone all the time at their offices. Or can't compel enough employees to the same view.

That is the source of interest in office conversions. Take those buildings that are largely or fully empty and turn it into something else. Seems reasonable. But Carly Pendergast at Trepp's CRE Direct notes "the removal of empty space still might not be enough to combat rising vacancy rates and companies giving back their office space."

First, the numbers. CBRE says that Cleveland has the first or second highest percentages of office stock targeted for conversion, depending on how it's measured. By percentage, it was at the top by the third quarter in 2023 at 11%, or 3.5 million square feet planned or in progress across eight projects. Boston had the largest total with 6.1 million square feet. Of the top 10 markets for office conversions, seven had a vacancy rate higher than the national average of 18.2%. Boston and San Francisco were the only two with zero office-to-multifamily conversions.