Office-to-apartment conversions are booming in NYC and this is why

From spreadsheets to bedsheets — that’s the biggest news in Big Apple real estate.New state and city measures are spurring property owners to turn obsolete office buildings into modern apartments. The next eight years will likely see nearly 19,000 residential units created out of former office space — on top of 5,500 already converted since 2010.It’s an impressive total in an age when putting up a single new building with 300 apartments can take five or more years to plan, finance and build — not including the time it takes to buy the land and demolish old buildings.“It’s now significantly easier to convert buildings across New York City,” said Planning Commissioner Dan Garodnick, who pushed for the changes and calls conversions a “a win-win, helping us through pandemic-related disruptions by creating much-needed housing and putting underused commercial space to better use.”The phenomenon gained traction from two government actions.

A state program grants tax abatements in exchange for making 25% of rental apartments created by conversions “affordable” — rent no more than one-third of median neighborhood income.Meanwhile, Mayor Eric Adams’ “City of Yes” measures, passed last month, made buildings that opened as recently as 1991 conversion-eligible, compared with earlier cutoffs at 1961or 1977, depending on location.The measures also opened the whole Big Apple up to conversions, which previously were allowed only in parts of FiDi, West Midtown and a few high-density areas like Long Island City.Most earlier conversions were in the Wall Street area, which many companies left in the 1990s.Most notably, 70 Pine Street, a landmarked, 1932 skyscraper, went dark after AIG moved out in 2009.

After several false starts by real estate firms deterred by the cost and complexity of conversion, it was reconfigured by Rose Associates and DTH Capital between 2012 and 2016.The $600 million job yielded more than 600 luxury rental units, which ...