Owners Of 64 NYC Office Buildings Exploring Residential Conversions
New York City’s Conversion Accelerator Program has received interest from 64 office landlords seeking to convert their properties to housing.
Four buildings have already been converted or begun construction through the accelerator, creating about 2,100 apartments. Others, Lalezarian Properties’ 650 First Ave. and Vanbarton Group’s 980 Sixth Ave., have received permits to begin renovations for reuse, Gothamist reported.
The accelerator, announced in August, assists developers in navigating city laws and bureaucracy to expedite complex conversion projects. Coupled with Mayor Eric Adams’ plan to rezone Midtown, the initiatives aim to create 20,000 apartments from underutilized office stock over the next decade.
The four in-progress projects are in the Financial District, an area that has relied heavily on office workers and is now attempting to reinvent itself. In addition to creating 24/7 districts, Adams’ administration also hopes to alleviate the housing crisis.
Just 1.4% of apartments were available to rent last year, and the rate is under 1% for units priced below $2,400 a month, according to Gothamist. Only 5% of apartments in the city are affordable to the average worker when factoring in upfront costs, according to a new report by StreetEasy and Tech:NYC reported by Bloomberg.
Meanwhile, 18% of Manhattan offices were vacant in the first quarter of the year, according to a Colliers report.
In an interview with Gothamist, City Planning Director Dan Garodnick called conversions a “win-win-win.”
While Gothamist noted that the newly converted apartments are not likely to be inexpensive — a studio apartment at recently converted 100 John St. is going for $3,695 a month — bringing more inventory to the city is likely to drive down costs for other units.
New York's state government is also pushing to boost conversions of commercial properties to housing. This year's budget deal included a new tax break for residential conversions that would allow developers to be exempt from property taxes for 35 years if they start a project by 2026 that reserves 25% of its units for households making 80% or less than the area median income.
SL Green CEO Marc Holliday estimated that the new tax break could stimulate 40,000 units of housing from converted office buildings.
The Adams administration is especially focused on trying to unlock conversions in Midtown, where SL Green is planning to convert 750 Third Ave. into 543 units of housing. The biggest conversion project in Manhattan that has been floated is at the former Pfizer headquarters at 219-235 E. 42nd St., where developers David Werner and Metro Loft Management are exploring a 1,500-unit project.
