How Office-to-Residential Conversions Are Remaking Downtowns

In this episode of The Business of Real Estate, Lucas and Luna unpack the high-stakes world of converting empty office towers into apartment buildings. As of June 2026, office vacancy rates in major U.S. cities have hit 22 percent — a record high. But conversions are expensive, slow, and often run into zoning and structural hurdles. Lucas explains the math behind a typical conversion: why a 1970s-era tower in downtown Chicago costs $400 per square foot to convert versus $250 to build new, and how tax incentives and zoning reforms are tipping the scales. The hosts also examine a specific case: the conversion of 100 South Wacker Drive in Chicago, a 37-story office building that will become 540 apartments. They discuss the hidden challenges — from narrow floor plates designed for cubicles to bathroom venting — and why developers now prefer buildings built before 1990 for their deeper floor-to-ceiling heights. The episode closes with a look at how cities like Calgary and San Francisco are using density bonuses and property tax abatements to spur conversions, and what that means for downtown revitalization. #OfficeConversion #ResidentialRealEstate #DowntownRevitalization #UrbanDevelopment #ChicagoRealEstate #SanFranciscoRealEstate #CalgaryRealEstate #ZoningReform #PropertyTaxIncentives #CommercialRealEstate #ConstructionCosts #AdaptiveReuse #HousingCrisis #UrbanPlanning #RealEstateTrends #Business #FexingoBusiness #BusinessPodcast Keep every episode free: buymeacoffee.com/fexingo