How to Tell if Your Office Building Is Worth Converting

• Conversion table: Gensler’s new Conversion+ tool helps owners see which office buildings are worth turning into housing and which aren’t.

• Stress lines: Fed’s plan to open its stress-test models could ease banks’ CRE lending fears.

• Failed assignment: Hudson’s Bay court ruling reignites debate over who truly controls lease rights.

• Upcoming webinar: Multifamily operators are using automation to streamline management, enhance security, and improve the resident experience. Sign up

Office

How to Tell if Your Office Building Is Worth Converting

The office-to-residential conversion boom is no longer a trend—it’s a full-blown movement reshaping skylines from Calgary to New York. But behind every glossy rendering is a simple question that can stop a project before it starts: is the building even worth converting? The answer isn’t always obvious. For all the success stories, only a fraction of office towers actually make sense once design, economics, and logistics collide. That’s why firms like Gensler are creating data-driven tools like Conversion+, designed to help owners know—quickly—whether a property has real residential potential before sinking money into studies and consultants.

At the heart of every conversion is math. Unit mix, floorplate depth, parking ratios, and HVAC systems all play decisive roles in whether an idea pencils out. A 1970s midrise with high ceilings and compact floors might be perfect; a sprawling 1990s office park with a maze of cubicles might never see daylight—literally. Gensler’s team has learned that the most promising buildings often aren’t the flashiest but the ones with good “bones”: clear light paths, efficient cores, and outdated systems that are ready for a reset.

The most successful projects are the ones that treat conversion as opportunity, not compromise. With the right mix of analysis and imagination, empty offices can evolve into livable, connected communities. As cities everywhere search for ways to revive their downtowns, the new competitive advantage isn’t just design—it’s understanding the structure you already have and the value hidden within it.

Overheard

New Stress Test Rule Could Ease Pressure on Banks’ Property Portfolios

The Federal Reserve’s new proposal to give banks more visibility into its stress-testing process comes at a crucial time for the financial sector. Regional and national banks alike are facing heightened scrutiny over their exposure to commercial real estate loans, a category that has become a political and investor flashpoint since the wave of office loan defaults and value write-downs earlier this year. The Fed’s plan would make the models and scenarios behind the tests public and open them to feedback, a change that could make it easier for banks to anticipate how their property portfolios will perform under regulatory review.

For banks trying to balance stricter lending standards with demands for credit in an uncertain market, that transparency could help restore confidence. Knowing which economic assumptions regulators will apply—such as unemployment, interest rates, or property value declines—could allow banks to model potential losses more precisely and adjust their balance sheets proactively. It also reduces the “black box” anxiety that has driven some institutions to over-reserve for real estate losses, potentially freeing up capital for new lending.

The move won’t fix the deeper challenges in the sector, but it may give banks a clearer playbook for navigating them. By reducing the guesswork in how regulators assess CRE risk, the proposal could encourage more measured lending decisions instead of the defensive pullback seen over the past year. For commercial property owners, that means a glimmer of relief—if banks can better understand how they’ll be judged, they might be more willing to lend again.

What the Hudson’s Bay Ruling Means for Commercial Leases

The recent court decision favoring pension funds in the battle over Hudson's Bay Company leases has blown open a conversation about the legal boundaries of lease assignments—a topic that’s quietly becoming material to how assets change hands. The ruling clarified that the pension-led buyer could enforce leases tied to defunct Hudson’s Bay stores, even as the original tenants collapsed. In effect, it suggests lease rights might be stronger—and more transferrable—than many believed.

Historically, lease assignments have been fraught with ambiguity around tenant consent, lease-guarantor obligations, and the landlord’s right of recapture. That’s why many CRE operators have avoided large-scale lease assumption models. Now, the Hudson’s Bay ruling provides fresh precedent showing that when a lease survives the original tenant’s bankruptcy, an assignee may still hold rights—calling into question the standard advice that a lease ends with the tenant.

For tenants, the ruling lands with a thud. It signals that assigning leases—once seen as a lifeline for struggling retailers or office occupiers—might now face steeper legal hurdles. That could trap tenants in unprofitable spaces or make restructuring efforts far more complex. Landlords, meanwhile, regain leverage, knowing they can reject unwanted assignees or extract higher concessions before approving a transfer. The decision could ripple through the leasing market, discouraging creative reuse of underperforming stores and limiting flexibility at a time when many companies are already rethinking their footprint. What looks like a win for property owners could, in practice, slow the adaptive reuse that keeps retail real estate dynamic.

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Propmodo Daily is written and edited by Franco Faraudo with contributions from readers like you and the Propmodo team.

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