Not just regulations. Basic issues like - office floor plates are wide, but all bedrooms need windows so you end up with weird sliver rectangular floor plans bc

Not just regulations. Basic issues like - office floor plates are wide, but all bedrooms need windows so you end up with weird sliver rectangular floor plans bc you can’t have an all interior apartment. Or - the plumbing in office runs up the core so you are constrained where your bathrooms and kitchens sit. Also most office buildings aren’t totally vacant and leases can be 10+ years. If you have 48 floors empty but an office tenant on the second floor and one on the 44th floor, and they both have 8 years left on the lease, you can’t just evict them for no cause. It compounds since most of these candidates are eg 30% occupied with a ton of small tenants. Most successful conversions are single tenant buildings where you just do a deal with that one tenant (JPM was tenant in one NYC building). Regs are an issue but not the main one.