America’s office market is seeing record discounts, with some buildings selling for a fraction of their pre-pandemic value. In Chicago, a 485,000-square-foot office sold for $4 million, down from $68 million ten years ago. In Denver, the Energy Center changed hands for $5.3 million, compared with $176 million in 2013. Both deals were more than 90% below their previous prices.
Even the federal government sold a 940,000-square-foot building for just $24 million, according to The Wall Street Journal.Â
Owners and lenders are finally acknowledging the impact of hybrid work, high interest rates, and changing demand. Many had held properties hoping for a turnaround after Covid, but now, they are taking massive losses to move on.
From Empty Towers to Urban Farms and Apartments
Developers are turning distressed offices into alternative uses. In Chicago, a former office is being converted into an urban farm and education center producing berries, lettuce, and herbs. Steep discounts make costly structural changes, like atriums or floor reconfigurations, financially viable.
Residential conversions are also rising. Over 90,000 apartments are currently in conversion nationwide, up 28% from last year. Tax incentives and government programs are fueling projects in cities like New York, Chicago, and Washington, D.C.
Rising Sales, Investors Eye Distress
Investors purchased 204 distressed offices last year, up from 133 in 2024, totaling $5.2 billion. In the first two months of 2026, distressed sales hit $808 million, a 24.5% increase from the same period last year. Banks, special servicers, and institutional investors are offloading properties, while high-net-worth buyers are stepping in to redevelop them.
Some buyers focus on cash flow from existing tenants, while others, like Hossein Fateh, plan major residential conversions. Across downtown and suburban markets, sharp discounts are enabling creative reuse, including industrial redevelopment and luxury apartments.
Essentially, the U.S. office market’s long decline—accelerated by hybrid work, empty buildings, and high costs—is creating opportunities for buyers willing to take risks. While prime office towers in top locations still command high rents, many older or poorly located buildings are being sold for pennies on the dollar, paving the way for urban reinvention.
