America’s biggest cities are sitting on billions of dollars in potential real estate value, but unlocking it may depend on rethinking what downtown office space is for.
A new report from Cushman & Wakefield finds that re-imagining underused office properties could release more than $120 billion in value across 15 major U.S. cities. The study builds on a 2023 report from the firm, which argued that many of the economic struggles facing downtown areas were rooted in an imbalance within citywide commercial real estate portfolios.
The so-called urban doom loop—characterized by decreased foot traffic, rising vacancies, falling asset values and shrinking tax bases—has hit downtown markets especially hard. According to Cushman & Wakefield, offices make up an average of 70% of the commercial property base in central districts, with some cities seeing that share climb into the high 80% range. That heavy dependence has become a liability as vacancy rates remain elevated.
Between the fourth quarter of 2019 and the second quarter of 2025, vacancy rates rose sharply across the 15 cities included in the analysis. In Atlanta, downtown office vacancies jumped from 16.0% to 29.8%; in Denver, from 16.3% to 38.3%; and Seattle went from 4.4% to 38.5%.
Even in markets where vacancy improved, such as Miami, office space still carried elevated risks. On average, absorption rates were negative every quarter since late 2019, with one brief exception in the fourth quarter of 2023. By mid-2025, the average vacancy rate across the cities stood at 26.3%.
The analysis also highlighted the value concentration of walkable urban centers. In the 208 neighborhoods studied, these areas accounted for just 3% of land area but 26% of real estate valuation. That concentration underscores both the economic stakes and the potential fallout when offices remain empty. Reduced use of downtown offices doesn’t only hit property tax rolls—it also ripples through sales tax receipts from retailers, restaurants and entertainment venues once reliant on office worker traffic.
Cushman & Wakefield modeled the potential gains of converting weaker office properties into alternative uses, ranging from residential to mixed-use developments. The firm developed two estimates based on the relative market quality of existing office assets and potential conversion projects.
Under the first scenario—considered the most realistic benchmark—downtown conversions could unlock $104.6 billion in additional value, while non-downtown conversions might generate $15.9 billion. Under a more aggressive assumption, those totals rise to $207.9 billion and $133.3 billion, respectively.
The report concludes that “substantial opportunity” exists for investors and developers willing to tackle the complexity and cost of conversions. Replacing less desirable office space with higher-value uses, Cushman & Wakefield argues, is essential to stabilizing downtown markets and reshaping urban real estate portfolios for the future.
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