Old office space might be the most misread asset in commercial real estate right now. Owners see vacancy and assume the building lost its value. Investors drive past half-empty towers and write off the whole class. The smartest operators in 2026 see the same buildings and see a window that won't stay open long.
The numbers back them up. National office vacancy sits at 18.2% and has been climbing since 2020 (Yardi Matrix). In a recent LinkedIn poll of commercial real estate professionals, 78% said hybrid work is here to stay and offices will not return to pre-COVID attendance. That shift created a permanent gap between old office supply and tenant demand.
Old office space doesn't have to be a liability. Owners who act now can convert, reposition, restructure, or sell at prices that still hold upside. Here's how, with the data and the poll results from the people making these calls today.
Why old office space is the opportunity right now
High vacancy is colliding with a wall of debt. A total of $167 billion in U.S. office mortgages come due in 2026, followed by $123 billion in 2027 and $76 billion in 2028 (Mortgage Bankers Association). That is $366 billion of office debt hitting the market in three years, most of it underwritten when rates and occupancy looked nothing like they do today. High vacancy plus looming maturities means owners face a choice: act on old office now, or watch the market force their hand later.
When we polled commercial real estate professionals on their top priority for old office space, repurposing and renegotiating tied at 44% each. Luxury amenities came in at 11%, and upgrading common areas got zero votes. The industry has moved past cosmetic fixes. Owners know old office needs a structural change in how it generates revenue.
That urgency showed up again: 55% of respondents said they'd sell underperforming office assets to fund growth. Another 36% would sell only with a guaranteed return. Just 9% want to hold. The days of sitting on old office and waiting for the market to recover are ending.
Convert underperforming office into residential
Office-to-residential conversion went from niche experiment to national strategy. More than 90,000 apartment units are in the pipeline from office conversions, a 28% jump over last year (Bisnow). Office now accounts for 47% of all adaptive reuse projects in the country (RentCafe).
The math works for owners who pick the right buildings. The best candidates have floor plates under 25,000 square feet, natural light on multiple sides, and proximity to transit or walkable neighborhoods. Deep floor plates cost more to convert because you have to bring light and air to every unit. Houston, Dallas, and Chicago are leading with tax incentives and streamlined permitting. If you own old office in a downtown core with housing demand, this path deserves a serious look. (Why downtown Houston.)
Reposition as flexible coworking
The global coworking market is projected to reach $27.6 billion in 2026, and 54% of operators report profitable locations (Allwork.space). For owners who want to keep the building, converting part or all of it to flexible workspace fills vacant floors faster than chasing traditional long-term tenants.
Our poll backs the direction. Asked whether technology will replace the need for physical offices, 48% said only in some industries, 26% said yes, and 26% said no. Most professionals still see a role for office. The format has to change. Flexible coworking meets that demand with short-term commitments and shared overhead. The spaces that perform best sit in mixed-use districts with restaurants, gyms, and transit nearby. Suburban office parks can work too, but you'll have to invest in the tenant experience to compete. (Owning vs. leasing.)
Renegotiate and restructure leases
Conversion and coworking aren't the only plays. For owners who want to keep operating as a traditional office, restructuring leases can boost occupancy without a heavy capital outlay.
Our poll found return-to-work rates still split the industry. Asked how current attendance compares to pre-COVID, 33% said much lower, 27% somewhat lower, 33% about the same, and 7% higher. Occupancy depends on who your tenants are and what they do. If your building houses remote-first tech companies, standard lease terms are an uphill fight.
The owners getting results are restructuring with shorter terms, expansion clauses, and tenant improvement allowances that let occupants customize space. A five-year lease with a two-year exit attracts companies that need space now but won't commit to a decade. Pair that with competitive rates and you can improve occupancy even in a down market. (Factors to weigh when renting.)
Sell strategically and redeploy the capital
Sometimes the best move is to sell and put the capital into assets with stronger fundamentals. Our poll supports it: 55% said they'd sell underperforming office to fund growth. Add the 36% who'd sell with a guaranteed return, and that's over 90% of the industry ready to move on from dead weight.
The key is selling at the right time with the right positioning. Old office with a conversion angle attracts a different buyer pool than a standard office listing. If your building qualifies for residential or mixed-use conversion, market it that way. Adaptive-reuse buyers pay more for a property they can reposition than a traditional office investor pays for high vacancy. Houston owners have an edge here: population growth, business-friendly rules, and housing demand create a built-in buyer base. (Find the best commercial property.)
Frequently Asked Questions
What's the best use for old office space in 2026?
It depends on location, condition, and local demand. The four most profitable paths are residential conversion, coworking repositioning, lease restructuring, or a strategic sale. Downtown cores with high walkability convert well to residential. Properties near transit perform best as coworking. Strong bones with weak occupancy can stabilize through hybrid-friendly lease terms.
How much does it cost to convert old office to apartments?
Conversion runs $100 to $400 per square foot depending on the existing infrastructure. Buildings built after 1970 with smaller floor plates, operable windows, and adequate ceiling heights convert most efficiently. Plumbing is usually the biggest expense. Many cities offer incentives that offset 15 to 25 percent of project costs (RentCafe).
Is office occupancy expected to recover in 2026?
Most analysts expect occupancy to stabilize, not fully recover. Our poll showed 78% believe hybrid work is permanent and only 7% reported higher attendance than before the pandemic. National occupancy is hovering around 60 to 70 percent of pre-COVID levels, and most forecasts hold that range through 2027 (Yardi Matrix).
What are the tax benefits of converting old office space?
Many municipalities offer property tax abatements for office-to-residential conversions, often 10 to 25 years. Federal historic tax credits can cover up to 20% of qualified rehabilitation on National Register buildings. In Texas, Chapter 380 agreements let cities rebate a portion of property taxes for projects that add housing or jobs. Consult a tax advisor who specializes in commercial real estate for your specific project.
Turn your old office into your next win
The old office market isn't coming back to what it was. That's exactly what makes it one of the best opportunities in commercial real estate right now. Convert, reposition, restructure, or sell. The owners who act in 2026 capture the value the hesitant ones leave on the table.
Own old office in Houston and want to weigh your options? Call me this week at 832.560.2100, or reach RE/MAX Commercial Advisors Group. We know the local market, the conversion pipeline, and the investor landscape. What matters to you matters to us.