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**Office-to-Residential Conversion Trend Accelerates in Manhattan**
The pace of office-to-residential conversions in Manhattan has surged in recent years, according to new research by Cushman & Wakefield’s Lori Albert and Reed Hatcher. What once averaged less than 1.2 million square feet annually has now skyrocketed: 1.6 million square feet were converted in 2023, 3.3 million in 2024, and as of August, 4.1 million square feet had already been repurposed, with another 8.8 million square feet of potential conversions in the pipeline.
“As older office buildings have struggled to attract tenants in today’s hybrid work environment — where vacancy rates remain above 20% — building owners are increasingly exploring residential reuse as a viable transformation strategy,” noted Albert and Hatcher.
The recent report, titled *Rethinking Space: The Rise of Office-to-Residential Conversions in New York City*, highlights that challenges such as stubborn vacancies and falling office property values are only part of the equation. Regulatory changes, such as the implementation of the 467-m tax incentive and policy shifts including the lifting of the Floor Area Ratio (FAR) cap, have also supported this trend.
One high-profile example is 675 Third Avenue — a Midtown Manhattan office property that was acquired earlier this year with the intention of converting it into residential use.
Looking ahead, the transformation of office space into housing will be a key topic at the Connect New York Apartments Investment & Finance conference on October 23, 2025. The event will gather leading owners, investors, developers, brokers, and lenders to discuss strategies for adaptive reuse, evolving capital markets, distressed asset opportunities, and the dynamic challenges facing New York’s multifamily sector.
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