Some U.S. Offices Are Selling for 90% Less

Key Takeaways

• Chicago office sold $4M, 94% below 2013 price
• Denver Energy Center changed hands for $5.3M, 97% discount
• Federal 940k‑sf building sold for $24M, steep loss
• Office‑to‑residential conversions up 28%, 90k apartments nationwide
• Distressed office sales rose 24.5% in early 2026, $808M total

Pulse Analysis

The U.S. office market has entered a deep correction as hybrid work, rising borrowing costs and excess vacancy force owners to accept fire‑sale prices. Recent transactions—Chicago’s 485,000‑sq‑ft tower for $4 million and Denver’s Energy Center for $5.3 million—represent discounts exceeding 90% from peak valuations. Such steep markdowns reflect lenders’ willingness to cut losses rather than hold onto underperforming assets, and they underscore the broader real‑estate sector’s pivot away from traditional office demand.

Developers are capitalizing on the price plunge by converting distressed office spaces into higher‑value uses. In Chicago, an old office is being transformed into an urban farm and education hub, while nationwide conversion pipelines now include over 90,000 apartments, a 28% increase year‑over‑year. Federal tax incentives, local zoning reforms and the urgency to address vacant square footage are accelerating projects that turn office floors into residential units, hotels, or mixed‑use complexes, reshaping city skylines and diversifying revenue streams.

Investor appetite for distressed office assets is rising, with 204 properties changing hands last year—a jump from 133 in 2024—totaling $5.2 billion. Early‑2026 sales already hit $808 million, a 24.5% rise versus the prior year. Institutional players, special servicers and high‑net‑worth individuals are betting on the long‑term upside of repurposing, balancing the risk of lingering vacancy against potential cash flow from new tenants. As prime towers retain premium rents, the bulk of the market’s future will likely be defined by creative reuse of older, poorly located office blocks.