New York City is seeing nearly twice as many offices being converted into apartments as a year ago — a whopping 16,358 planned this year, compared to 8,310 12 months ago, according to a new survey.
The latest office tower earmarked for residential transformation is the landmarked Candler Building at 222 W. 42nd St. The project by Yellowstone Real Estate Investments just scored a $205 million construction loan. Some 176 market-rate and “affordable units” will replace mostly empty offices at a site where Yellowstone earlier planned a hotel.
It took control of the tower in 2022 after its former owners nearly lost it in foreclosure. The property’s planned re-invention comes on the heels of a survey that found that the Big Apple conversion genie is not only out of the bottle, but it’s leapfrogging every other city in the US by a wide margin.
More than 26,000 apartments total are in the conversion “pipeline,” most of them in Manhattan and the great majority to be carved out of former office buildings, according to the survey by real estate platform RentCafe, which is owned by Yardi, the largest shareholder of WeWork.
The Big Apple has twice as many former office and hotel buildings turning into homes as runner-up Washington, DC, does, and four times as many as Chicago. The New York total is nearly double the figure for a year ago, according to RentCafe’s Future Office-to-Apartment Report.
The conversion boom benefits the city in two crucial ways. In the past two decades, it created tens of thousands of new places to live, helping to ease the housing shortage. At the same time, it swept away around 30 million square feet of offices, mostly in obsolete, old buildings in the Financial District.
The phenomenon has now spread both uptown and into buildings that aren’t very old. It isn’t happening by magic, nor even entirely because of demand. City Hall under former Mayors Bill de Blasio and Eric Adams eased rules that limited conversions to specific parts of town and streamlined the approval process.
“New York has developed the best set of rules in the country to encourage converting commercial space to residential use,” said REBNY President James Whelan.
“Antiquated offices are being replaced with much needed housing that spurs new retail and more dynamic neighborhoods.”
Mitchell L. Moss, a professor of urban policy and planning at NYU, said, “We are creating new housing, without forcing people to relocate, by reinventing old office structures just as we did with obsolete manufacturing lofts in the 1970s and ‘80s.”
Moss credited former City Planning Chair Dan Garodnick and Alex Schierenbeck, the current general counsel for the Planning Department, for “easing regulations and increasing density.
“Approximately 12,000 new housing units are planned or under construction in lower Manhattan alone,” Moss said.
“More housing will be built there in the next eight years than will ever get built on the fantasyland known as Sunnyside Yards. New housing will also create thousands of jobs, and far better paying jobs than in manufacturing or in early childhood care centers.”
Among the downtown conversions is 111 Wall St., a 1960s tower that was redesigned and modernized for today’s market — but, as The Post reported, failed to land tenants when the pandemic struck. Owners InterVest Capital Partners and MetroLoft are proceeding to create 1,500 new homes behind the gleaming new curtain wall facade.
In Midtown, SL Green is carving 680 rental units out of 750 Third Ave., a 35-story, 1958-vintage tower where 13 floors are being chopped out to create a winter garden. The $805 million project is set to be completed in 2029.
A different developer, TF Cornerstone, just started work on 135 East 57th St. — a 1980s address that will yield 350 new apartments.
Other, even larger conversions were recently completed or are coming soon to the 5 Times Square office tower, 25 Water St. downtown and the former Pfizer headquarters on Third Avenue and 42nd Street.
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