Pfizer World Headquarters is becoming 1,500 apartments. Photo via WikiCommons
New York City’s first wave of office-to-residential conversions could yield over 17,000 new apartments, highlighting the potential for such projects to help ease the city’s housing shortage, according to a new report. Published on Thursday by City Comptroller Brad Lander, the report finds that 44 office conversions initiated after the pandemic could transform 15.2 million square feet of office space into as many as 17,400 homes over the coming years. However, the report warns that the city’s new 467-m tax break may be overly generous, potentially costing $5.1 billion in lost property tax revenue over 37 years.
Lander’s report shows the promise of office-to-residential conversions to boost the city’s housing supply, especially in Manhattan’s central business district south of 59th Street.
The report lists 44 known conversion projects that developers have completed, started, or proposed. Among them are some of the city’s largest efforts, such as 25 Water Street—formerly the headquarters of JPMorgan Chase and the New York Daily News—now home to 1,300 apartments; the former Midtown East headquarters of Pfizer, which is set to become 1,500 apartments; and 55 Broad Street, the onetime Goldman Sachs offices now converted into 571 homes.
Since May, developers have announced two major new conversion projects: rezoning 395 Flatbush Avenue Extension in Downtown Brooklyn to allow a 72-story building with over 1,200 apartments, and converting the 38-story 5 Times Square into 1,250 new homes.
Office-to-residential conversions have gained traction since the pandemic, which upended the real estate market and left many large Manhattan office towers largely vacant amid the rise of remote work. The trend accelerated after the 2024 passing of the new 467-m tax exemption program, which offers developers tax breaks for converting offices to housing if at least 25 percent of units are set aside as affordable.
The 2024 legislation also removed the 12 floor-area-ratio (FAR) cap, allowing residential buildings up to 15 to 18 times their lot size while requiring affordable housing.
While Lander’s office praises lawmakers for extending tax benefits to projects starting before June 2026, the report criticizes the program’s generous 90 percent exemptions for all projects below 96th Street—including Lower Manhattan, where low office property values might have pushed developers to seek residential conversions even without tax incentives.
As Crain’s noted, the city could lose $5.1 billion in tax revenue over the life of the 467-m exemption compared to the property taxes the buildings would have paid as offices or if converted without affordable units.
The report concludes that lawmakers did not “fine-tune” all aspects of the program and warns that developers in Lower Manhattan will likely receive overly generous tax breaks. It also highlights the city’s progress in “absorbing” the oversupply of office space by creating new mixed-use and mixed-income neighborhoods that help restore vibrancy to its central business districts.
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