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New York City’s office-to-residential dream is getting a reality check.
Since the pandemic, developers and landlords have ramped up conversions of offices into residential developments. The top 13 projects, all based in Manhattan, will produce more than 121,300 units to the borough across 7.4 million square feet of space, according to a TRD Data analysis of initial alteration filings from 2020 to present.
Unsurprisingly, these mega projects, which have at least 500 apartments planned, are clustered in the city’s major office neighborhoods Downtown (nine projects) and in Midtown (four projects).
These complex projects have been pushed into the spotlight this week when city officials on Tuesday had halted construction at the former Pfizer building at 219-235 East 42nd Street in Midtown East, an office conversion underway from Nathan Berman’s MetroLoft and real estate investor David Werner, as the building had shown signs of a potential collapse. The situation at the site has since stabilized.
The project, which was expected to be completed in 2027, spans two buildings and will bring roughly 1,500 apartments to Midtown East; it’s among the largest such projects underway in the Big Apple.
MetroLoft is also behind several other large conversion projects across Manhattan: another 1,500-unit project at 111 Wall Street, and a more than 600-unit project at 101 Greenwich Street.
Major renovations of old and large office properties require extensive analysis and capital investment, especially if developers want to add levels to buildings, like at the Pfizer property, where the cause of the near-collapse remains under investigation.
Developers and landlords of office buildings pivoted to conversion projects after the pandemic, which left many of these mega properties vacant or near-vacant. The trend is prevalent in many metropolitan areas around the country. For instance, Dalian Development scooped up a former government office building at 301 Seventh Street Southwest in Washington, D.C., with plans to turn the property into a multifamily complex. In Los Angeles, Jamison and Kennedy Wilson are turning the 400,000-square-foot former World Trade Center office complex into an affordable housing development with more than 500 units.