CONTACT US
Share: Share on Facebook Share on Twitter Share on LinkedIn I recommend visiting cushmanwakefield.com to read:%0A%0A {0} %0A%0A {1}

Office to Residential Conversions Surge to Record Levels in New York City, Driven by Market Forces and Policy Support

Elise Maguire Ferrara • 10/7/2025

NEW YORK – Sept. 7, 2025 – New York City is experiencing a wave of office-to-residential conversions, marking the most active period since 2008, according to a new report from Cushman & Wakefield. Long discussed as a solution to the city’s dual challenges of high office vacancy and limited housing supply, residential reuse has now taken center stage as more projects move from proposal to execution.

According to the report, office to residential conversion starts, which totaled just 1.6 million square feet (msf) in 2023, more than doubled to 3.3 msf in 2024. Already in 2025, 4.1 msf of conversions have commenced through August—surpassing the entirety of last year in just eight months. Looking ahead, an additional 8.8 msf of projects are currently proposed for post-2025, underscoring the durability of this trend.

“Residential conversions have shifted from a talking point to a market reality,” said Reed Hatcher, Senior Manager of New York City Research for Cushman & Wakwfield. “We’re seeing record-setting activity in 2025, fueled by a combination of elevated vacancy, attractive economics, and supportive policies that remove some of the barriers to entry that developers previously faced. Conversions are not just repositioning obsolete office stock—they are helping address New York City’s critical housing shortage and reshaping the future of our built environment.”

This surge in conversions is the product of three key factors:

  • Vacancy: Manhattan office vacancy remains elevated at 22.3% as of August 2025, more than double the pre-pandemic five-year quarterly average of 9.4%. Owners are increasingly motivated to reposition underperforming assets.
  • Economics: Office investment values have reset significantly since the pandemic, making residential reuse a financially viable higher and better use for many obsolete properties.
  • Policy: Initiatives such as the Office Conversion Accelerator Program (2023), the 467-m tax incentive (2024), the City of Yes zoning reforms, and the 2025 lifting of the FAR cap have collectively expanded eligibility and reduced barriers, paving the way for more projects to move forward.

The latest pipeline signals that conversions will continue to play a central role in the city’s real estate recalibration, balancing supply-demand dynamics while expanding the much-needed housing stock for New Yorkers.

You can access the full report here.

About Cushman & Wakefield
Cushman & Wakefield (NYSE: CWK) is a leading global commercial real estate services firm for property owners and occupiers with approximately 52,000 employees in nearly 400 offices and 60 countries. In 2024, the firm reported revenue of $9.4 billion across its core service lines of Services, Leasing, Capital markets, and Valuation and other. Built around the belief that Better never settles, the firm receives numerous industry and business accolades for its award-winning culture.  For additional information, visit www.cushmanwakefield.com.

CAN'T FIND WHAT YOU'RE LOOKING FOR?

Get in touch with one of our professionals.

With your permission we and our partners would like to use cookies in order to access and record information and process personal data, such as unique identifiers and standard information sent by a device to ensure our website performs as expected, to develop and improve our products, and for advertising and insight purposes.

Alternatively click on More Options and select your preferences before providing or refusing consent. Some processing of your personal data may not require your consent, but you have a right to object to such processing.

You can change your preferences at any time by returning to this site or clicking on  Cookies

More Options
Agree and Close
These cookies ensure that our website performs as expected,for example website traffic load is balanced across our servers to prevent our website from crashing during particularly high usage.
These cookies allow our website to remember choices you make (such as your user name, language or the region you are in) and provide enhanced features. These cookies do not gather any information about you that could be used for advertising or remember where you have been on the internet.
These cookies allow us to work with our marketing partners to understand which ads or links you have clicked on before arriving on our website or to help us make our advertising more relevant to you.
Agree All
Reject All
SAVE SETTINGS