No: converting commercial space to residential is more expensive than building new residential

Everything I'm seeing says the answer just isn't as simple as you're stating here in your post.

• Are ALL office buildings good conversion candidates for residential? No.
• Are ALL office buildings bad conversion candidates for residential? Also, no.
• Are there a measurably high enough number of office buildings that are good candidates for conversion for residential? Yes!

The more accurate answer is in the middle. Not all office buildings are created equal, and not all cities have excess land meaning there higher conversion costs are still worth it over building new residential. According to one study of 1000 office buildings evaluated in cities across the USA and Canada, 25% were good candidates for cost effective conversion to residential. Keep in mind this can include both small office buildings as large ones. source

"Now, developers in the city have five office conversion projects underway and 10 more in development, Paynter noted in his blog. He said he expects these initiatives to increase the number of residential units there by 24%. "

"The success in Calgary has prompted over a dozen cities and more than 100 building owners across North America to seek similar solutions for their struggling Class C and B buildings, Paynter said in the blog post. Projects including Franklin Tower in Philadelphia; 1 St. Clair West in Toronto, Ontario; and The Residences at Rivermark Center in Baton Rouge, Louisiana, show how outdated office buildings can be reconfigured into amenity-rich residential communities, adding value to the cityscape, Paynter wrote."

In some cities even if the cost of conversion may be higher than building new residential, it may still be worth it to do conversion instead of new build simply because there isn't land free in the right places. source I postulate in these cases, building new residential would also have to include the cost of demolishing the existing office building to reclaim the land which suddenly would make conversion cheaper again.

"Manhattan not only sees the most conversions at present, but it also has the most office space meeting our criteria for future conversion potential, and so we expect it to remain the leading market for OTM conversions."

From all sources I found the best office buildings to convert are actually older and smaller ones that are decades old, not new ones. Not only are the older office buildings easier/cheaper to convert these are also less attractive to businesses which prefer newer building designs and flexibility. This is one of those narrow cases where its beneficial to both groups. There are no losers in these specific cases.

Like may things in life, there isn't one simple answer, and that appears to be the case here.