Developers are converting the former Pfizer headquarters near Grand Central into 1,600 apartments, the largest office-to-residential conversion in the US. The project reflects a growing trend in New York City, where older, underused office buildings are being transformed into housing to address the cityโs severe housing shortage. Backed by new zoning rules and long-term tax incentives, these conversions are spreading from downtown to Midtown, helping reduce office vacancies while creating thousands of new homes, including affordable units, according to Bloomberg. They write:
Roughly two blocks from Manhattanโs Grand Central Terminal, construction workers are stripping down the former Pfizer Inc. headquarters to its columns, beams and concrete slabs.The office towers are expected to be turned into roughly 1,600 rental apartments, rife with amenities such as a rooftop pool and fitness center. For now, contractors are pouring a new floor every four days to try to meet the 2026 opening.
The developers, Metro Loft and David Werner Real Estate Investments, are tackling the biggest office conversion project in the US. […]
New Yorkโs housing crisis has also come into stark focus as the city prepares for a heated mayoral election in November. Zohran Mamdani, who won the Democratic primary, has been pushing to freeze rents on the cityโs stock of rent-stabilized apartments. That could throw a wrench into developersโ calculations on projects, as many companies are relying on a tax break that requires them to include those types of units in their buildings. […]
Despite these obstacles, conversions are booming and helping to repurpose swaths of empty office space that popped up more during the pandemic. The rise in remote work caused some employers to back off on their real estate footprints, while tenants also started preferring new or renovated buildings with top amenities to lure employees back. […]
The office market has started to recover too. In Manhattan, new office leasing in the first eight months of this year was up 38% from a year ago, according to CBRE. The vacancy rate in August was down to about 14% from roughly 16% at the start of 2024.
But thereโs still a vast amount of unused space that some developers and lawmakers argue could be put to better use. According to CBRE, if all of the planned and rumored conversion projects were to be completed, it would eliminate another 21 million square feet of offices, a 7% reduction from 2023.
โWeโre taking the limping office buildings off the market,โ Berman said.
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