What Is Happening to Unused Office Space From the Rise in Remote Work?

On a Tuesday morning, a downtown office tower can look busy from the street: lights on, elevators moving, a few people carrying coffee through the lobby. But upstairs, whole floors may be quiet. Desks sit unused, conference rooms stay dark, and the office that once held a full team is now visited only a few days a week. For an employer, that can mean paying for more space than the business needs. For a city, it can mean less activity around restaurants, shops, and transit stops that depended on daily commuters. The question is no longer simply whether people will return to the office. It is what owners, employers, and communities should do with buildings designed for a work pattern that has changed.

The short answer: unused office space is being downsized, subleased, redesigned for hybrid work, or converted to other uses, especially housing. Not every empty office can become apartments, and not every company is leaving its workplace behind, but work-from-home and hybrid schedules have pushed a broad reset in how office space is used and valued.

Why more office space is sitting empty

Work-from-home changed the daily need for assigned desks and large, permanent office footprints. When employees work remotely some or all of the week, a company may find it does not need one desk per person, multiple large conference rooms, or several floors in the same building. That does not mean offices have disappeared. Many organizations still need places for collaboration, client meetings, training, secure work, and culture-building. The difference is that businesses are increasingly judging space by how often and how well it is used, rather than treating square footage as a fixed sign of growth.

The result is a gap between leased space and actual attendance. In early 2025, U.S. office vacancy was around 20%, while physical occupancy was estimated at 50% to 55%, according to reporting by PropertyCasualty360 that cited RentCafe and Yardi Research. In practical terms, both vacant offices and partially occupied offices are part of the challenge. PropertyCasualty360

A company may hold a long-term lease even after its workforce becomes more distributed. Another may keep a headquarters but consolidate satellite locations. Some tenants choose a smaller office in a more desirable building, while older or less adaptable buildings struggle to attract occupants.

What happens to an unused office?

There is no single outcome for an underused building. The best option depends on the building's layout, location, condition, financing, local market, and the owner's ability to invest in changes.

Companies reduce, share, or redesign their footprint

For tenants, the first response is often operational rather than architectural. They may:

• Let leases expire and move into smaller offices.
• Sublease unused floors to another tenant.
• Combine several locations into one.
• Replace rows of assigned desks with shared workstations.
• Add more meeting rooms and spaces for in-person collaboration.
• Set office attendance patterns that make better use of peak days.

A smaller office can still be highly useful if it supports the times employees are together. There can be tradeoffs, though. Crowding too many people into a reduced footprint on the same two or three days can create a frustrating experience. Employers need to understand when teams come in, which work requires in-person coordination, and whether the office supports those needs.

Buildings compete for the tenants that remain

Owners of office buildings may renovate common areas, improve building services, or modernize individual suites to make their properties more appealing. In a market with more available space, tenants often have greater ability to seek features that fit hybrid work, such as better meeting technology, flexible layouts, updated amenities, and locations that make commuting worthwhile.

This can widen the divide between buildings. A well-located property that can be refreshed may continue to attract tenants, while a building with outdated systems, deep floor plates, or expensive maintenance needs may face a harder path. For owners, unused space is costly. An empty floor produces less rental income while the building still requires upkeep, utilities, security, insurance, and financing. Those pressures can lead owners to negotiate more aggressively, invest in upgrades, sell, or consider a new use for the property.

Office-to-apartment conversion is the most visible answer

One of the biggest responses to surplus office space is conversion to residential use. Across the United States, empty offices are being repurposed as housing, and approximately 90,300 apartment units were planned to come from office conversions in 2026, according to RentCafe data reported by PropertyCasualty360. The same report notes that financial pressure and government-backed incentives are helping accelerate some conversions. PropertyCasualty360

Conversion candidates tend to share certain traits. Buildings with narrower floor plates, plentiful windows, and adaptable plumbing risers are easier to reshape into livable units, because residents need natural light and workable bathroom and kitchen placement in ways that open office floors do not. Older buildings with outdated mechanical systems, in weaker leasing markets, are often the ones owners are most motivated to convert, since bringing them up to modern office standards can cost more than a residential conversion.

Why conversion is not simple

Turning an office into apartments is more involved than adding kitchens and bedrooms. Residential buildings need a different arrangement of windows, plumbing, ventilation, elevators, fire safety features, and living spaces. A wide office floor can leave interior areas far from natural light, which makes some layouts impractical no matter how much money is invested.

The financial case matters too. A conversion needs enough expected residential income to justify construction and financing costs. Local housing demand, building condition, and project costs all influence whether an owner moves forward, which is why conversions cluster in cities with strong housing demand and a supply of older, well-shaped office stock.

Other possible uses for former office space

Housing receives the most attention, but it is not the only reuse option. Depending on local demand and the building's characteristics, unused office space may become:

• Hotels or extended-stay lodging
• Education or training facilities
• Medical or wellness-related space
• Flexible workspaces for smaller businesses
• Retail, dining, or entertainment on lower floors
• Mixed-use projects combining homes, services, and work areas

These alternatives have limits. A building's location may not suit every use, and a new concept still needs customers or residents. Repurposing is not an automatic cure for a weak downtown market, but it can help owners and communities move past the assumption that every commercial building must remain a traditional office.

What this means for employers

For employers, the unused-office question is really a workforce-planning question. Before renewing, shrinking, or redesigning a lease, leaders should look at how people actually work. Useful questions include:

1. Which roles truly need regular in-person work?
2. What activities benefit most from gathering in person?
3. How many people use the office on the busiest days?
4. Does the layout support focused work as well as collaboration?
5. What is the cost of space that is rarely used?
6. Could a smaller or more flexible arrangement better serve employees?

The goal should not be to force attendance simply to justify a lease, nor to eliminate offices without considering the value of in-person connection. A thoughtful workplace plan aligns the office with the organization's operating model, employee needs, and budget, and it requires clear communication so employees understand hybrid expectations and where teams will meet.

The office is changing, not vanishing

The old model of large offices filled every weekday no longer fits every employer or every building. Some space will be leased again, some will shrink or be redesigned, and some buildings will become apartments or mixed-use properties. The most durable response is to treat office space as adaptable infrastructure, matched to how people actually work today rather than how they worked years ago.

Informational note: This article is provided for general informational purposes only and is not legal advice. It does not represent the advice or opinion of the website or organization on which it appears.