Madison office redevelopment example showing Topgolf in Monona replacing former office buildings

 

Why Some Madison Office Buildings Are Becoming Redevelopment Sites

When Office Buildings Are Worth More as Dirt

Some Madison office buildings are no longer being valued as office buildings.
They are being valued for what comes next.
In 2024 and 2025, 17 office buildings in the Madison market sold for redevelopment or conversion. That represented 25% of all office sales and roughly 210,000 square feet of inventory.
Before 2020, office tear-downs and conversions were rare. Today, they are part of the market.

Key Takeaways

  • Some Madison office buildings are now worth more as redevelopment sites than office assets.
  • In 2024 and 2025, 17 office buildings sold for redevelopment or conversion.
  • Those sales represented 25% of Madison office sales and roughly 210,000 square feet of inventory.
  • Redevelopment is removing obsolete office space and creating new housing, hospitality, entertainment, and mixed-use projects.
  • For owners, the key question is whether the land is worth more than the building.

The First Question Has Changed

For owners, investors, and developers, the analysis is no longer limited to the rent roll.
The better question may be:
Is the land worth more than the building?
That depends on location, zoning, future land use, surrounding demand, and whether the existing office use still makes economic sense.
Several Madison-area projects show the shift.

Recent Madison Office Redevelopment Examples

Topgolf in Monona
Five former office buildings were demolished for a new entertainment use.
Developer: Galway Companies
Porchlight on East Washington
A new 70-unit supportive housing development is replacing obsolete office space.
Developer: LZ Management
The Duncan on Sherman Avenue
A 309-unit apartment project is replacing outdated office buildings.
Developer: Vermilion Development
The Waverly in Middleton
A 244-unit apartment community was built on a former office site.
Developer: Galway Companies

Why Owners, Investors, and Developers Should Care

Madison’s office vacancy rate is 16.2%. Without redevelopment, it would likely be higher.
That is the part many people miss. Redevelopment is not a side story. It is one reason the office market is not carrying even more obsolete space.
It removes outdated inventory. It creates housing. It opens the door for hospitality, entertainment, and mixed-use projects. It can also give owners an exit when the building no longer supports the value of the land underneath it.
For property owners, the message is blunt: your building’s current use may not be its highest value.
For investors and developers, the opportunity is in identifying which office assets still have a future as offices, and which ones are better off becoming something else.

Frequently Asked Questions

Why are some Madison office buildings being redeveloped?

Some older office buildings no longer support enough rent, occupancy, or investor demand to justify continued office use. In those cases, the land may be more valuable for another use.

How many Madison office buildings sold for redevelopment or conversion in 2024 and 2025?

Seventeen office buildings sold for redevelopment or conversion, representing 25% of Madison office sales and roughly 210,000 square feet of inventory.

Does redevelopment help Madison’s office vacancy rate?

Yes. Madison’s office vacancy rate is 16.2%. Removing obsolete office buildings from the inventory helps keep vacancy from moving even higher.

What should office building owners evaluate before selling?

Owners should look beyond current income. Location, zoning, future land use, surrounding development, and land value may all affect pricing.

What types of projects are replacing older office buildings in Madison?

Recent examples include apartments, supportive housing, hospitality, entertainment, and mixed-use projects.

 

This analysis is based on Oakbrook Corporation’s review of Madison-area office sales activity in 2024 and 2025, including properties identified as redevelopment or conversion candidates. Vacancy data reflects Madison office market conditions as tracked through Oakbrook’s internal market research and third-party market data sources.

Author, Chris Caulum

  Chris Caulum, Madison commercial real estate advisor with Oakbrook Corporation. 

 Chris Caulum, SIOR, CCIM
 Commercial Real Estate Advisor | Oakbrook Corporation

Chris Caulum advises owners, occupiers, investors, and developers on industrial and office real estate across Greater Madison and Dane County. His work includes sales, leasing, acquisitions, dispositions, site selection, and market strategy.

Chris tracks local leasing, sales, vacancy, construction, and user demand to help clients make better real estate decisions.

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