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Slow and Steady: A New Era of Office-to-Residential Conversions Reshape Manhattan

April 16, 2025 10 Minute Read

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  • New York City is entering a new era of office-to-residential conversions characterized by accelerating activity in Midtown and the conversion of large and modern office assets.
  • Manhattan’s current slate of conversions have a median age of 68 years, with 60% of the square footage located in Midtown and 60% in buildings constructed after 1961.
  • While the elevated office availability rate and an ongoing flight-to-quality expand the candidate pool for conversions, owners must still navigate a warren of challenges that suggest the pipeline of future projects will be realized over years as a steady stream and not a sudden flood.
  • An analysis of Manhattan’s office buildings with the highest availability as of January 2025 showed that 44 of them, containing 10 million square feet of stock, would make the most likely conversion targets, allowing for as many as 10,000 units of housing and potentially adding four million sq. ft. of displaced tenant demand to the market.
  • If every conversion project currently underway, proposed and rumored as of Q4 2024 was completed, it would remove approximately 16.5 million sq. ft of existing stock
    (-3.9%) and 3.5 million sq. ft. of available space (-4.6%) from the market, displacing 7.4 million sq. ft. of tenant demand, resulting in a 200 basis point drop in the availability rate.
  • While office-to-residential conversions cannot solve for the city’s glut of office space nor the shortage of housing, they will enhance the vibrancy of Manhattan’s office districts and make remaining office assets more competitive.