Where did you find those prices? NYC is so insanely diverse about living/office, I find it hard to quote something here. Average or median is mostly meaningless.

internet commenters are allowed to spitball, obviously a 800 sq ft 1 bdrm can go from anywhere between a quarter mil to 2 mil depending on the neighborhood and the view, OP's point is that converting to residential is a net positive for the real estate owner.

A few real estate trade websites I quickly googled. The $85 for commercial was “top tier” Manhattan commercial office space (the other tiers ranged to over half off IIRC) and the residential was a general average of inventory in 2022. Certainly for my dissertation I would have cleaner references, but I controlled a bit on the supposition by picking P90 vs avg to give the other side the statistical advantage.