Ameriprise tower sold for $6-million. Cost $300-million in 2016

Property in downtown Minneapolis, MN. 1-million sq ft, 31 stories, all was occupied by Ameriprise. They moved offices to suburbia and basically abandoned downtown. Buyer taking a flyer? Several other buildings also for sale. No takers yet.

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They tell us Covid work from home has had a major impact of office space demand. But that seems to be changing as more companies require employees to return to the office. Pres Trump just issued return order to govt workers.

Recently there has been more interest in converting office space to apartments and condos. Light and ventillation are often a limitation. We hear stories of conversions that include insertion of vertical air spaces in these buildings.

Younger generations seem to prefer big city living where you can walk to work and have stores and restaurants near where you live. (Now if only crime can be controlled.)

You can bet these projects take years to break even on costs. Getting it right for the next few decades is probably required for financial success.

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For practical purposes, office buildings lack the necessary plumbing and electrical systems to effectively become residences. As commercial spaces, all costs related to operating the building are tax write-offs each year. Owners of their homes/condos/townhomes/etc do not have that write-off every year. All those costs are a pure cost of ownership that must be paid–or else lose the home–AND incur substantive expenses in order to find a different place to live.

Yes, they tell us many of the office building conversions that get announced ultimately fall through. Maybe that is because of the tax write-off issues and additional unanticipated costs you mention.