- Don Peebles and Doug McNeely have launched a new investment firm, Donahue Douglas, aiming to raise $1.5B to convert offices into residential housing.
- The firm is targeting 10 major cities, with New York, Los Angeles, and Miami identified as top priority markets.
- Falling office values, housing shortages, and tax incentives are driving investor interest in conversion opportunities.
Turning Offices Into Homes
Developer Don Peebles and Doug McNeely launch Donahue Douglas to convert offices into housing, as reported by Globe St.
The duo plans to raise $1.5B for their new office conversion and are already two-thirds of the way there, Peebles told Bloomberg.
The firm is zeroing in on markets with severe housing shortages, including New York, Los Angeles, and Miami, which Peebles called their top three targets. Other cities on the radar include Boston, Washington, DC, Atlanta, and San Francisco—areas where high office vacancy rates are colliding with mounting demand for affordable and market-rate housing.
A Market Mismatch—And An Opportunity
“There’s an opportunity here to buy at prices we haven’t seen since the early ’90s during the S&L and banking crises,” Peebles said of Washington, DC, where the firm is actively scouting deals. The mismatch between available office inventory and residential demand is exactly the kind of market dynamic Donahue Douglas is looking to exploit.
The US is currently short about 12M housing units, including seven million affordable units and five million market-rate homes, according to Peebles. Office buildings sitting vacant in urban cores present a unique opportunity to meet that demand without the high costs and delays of ground-up construction.
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Tailwinds For Conversions
Several tailwinds are making conversions more attractive: steep discounts on vacant offices, local government incentives for adaptive reuse, and potential cost savings amid rising construction prices fueled by tariffs.
“In the short term, tariffs could drive up certain costs,” McNeely said, “but in the long term, the fundamentals remain the same. There’s still a vast housing shortage in the markets that we are focused on.”
Peebles has long described office-to-residential as a “once-in-a-generation opportunity,” and with capital raising nearly complete and strategic markets identified, Donahue Douglas appears well positioned to act on it.
Why It Matters
The growing push to convert office buildings into housing could reshape post-pandemic urban real estate—and Donahue Douglas is betting big on it. With office vacancy rates still elevated and housing demand still soaring, office conversions are becoming a central strategy for both cities and investors alike.
Look for more firms to follow suit as conversion economics continue to outperform traditional development in major metros.
