I assume you mean: The conversion alone might cost about $400 or $500 per usable square foot, Mr. Bernstein added, and would in many cases be more expensive th

I assume you mean: The conversion alone might cost about $400 or $500 per usable square foot, Mr. Bernstein added, and would in many cases be more expensive than building a new development. A recent Moody’s analysis of New York offices found that just 3 percent of the buildings it tracked would be viable for apartment conversions. The median rent for apartments in New York is $55 per square foot, which just 36 percent of office properties now fall at or below — and on top of that, there’s all the cost of conversion. $500 is nowhere near the fully-loaded cost to build new in any US city. The quoted man is comparing the cost to the delta in rent to his out-of-date understanding of what offices can yield. It is just a simple fallacy to believe that SF/NYC offices can command $75/sqft at any reasonable occupancy level going forward. The economics of conversions only don't work when offices command premium rents, it's not some axiomatic fact about the world (the way it was before the pandemic).