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**Office-to-Residential Conversion Trend Accelerates in Manhattan**
The transformation of outdated office buildings into residential spaces in Manhattan is picking up speed, according to recent research by Cushman & Wakefield’s Lori Albert and Reed Hatcher. While office-to-residential conversions once averaged less than 1.2 million square feet per year, that pace has surged dramatically. In 2023 alone, conversions totaled 1.6 million square feet. By 2024, the figure jumped to 3.3 million square feet, and through August of this year, another 4.1 million square feet had already been converted, with an additional 8.8 million square feet expected in the near future.
“As older office buildings have struggled to attract tenants in today’s hybrid work environment, with overall vacancy rates still hovering above 20%, owners are increasingly looking to residential reuse as a viable path forward,” write Albert and Hatcher.
But high vacancy and declining office property values are not the only factors at play. A new report titled *Rethinking Space: The Rise of Office-to-Residential Conversions in New York City* highlights the role of regulatory changes, such as the 467-m tax incentive and the lifting of the floor area ratio cap, in facilitating these transformations.
One notable example is 675 Third Avenue, a Midtown Manhattan office building recently acquired for residential conversion.
Looking ahead, adaptive reuse will continue to be a central topic at industry events. On October 23, 2025, the Connect New York Apartments Investment & Finance conference will gather top owners, investors, developers, brokers, and lenders to explore strategies for adaptive reuse, capital markets challenges, distressed asset opportunities, and the ever-evolving multifamily landscape in New York City.
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