Meeting Rooms to Living Rooms: How Feasible Are Office-to-Residential Conversions in NYC?

Key Takeaways:

• 85 million square feet of NYC office space — representing 15% of city’s office stock — is favorable for residential conversion, encompassing 754 office buildings
• An additional 34% of NYC office space has residential conversion potential but comes with design and structural restrictions, while 51% is much more difficult and cost-prohibitive to reconfigure for residential use
• Manhattan is home to 92% of the city’s most convertible office space with 79 million square feet
• Downtown Brooklyn concentrates 65% of the borough’s convertible office space
• 1.13 million square feet of Bronx office space is top-rated for conversion to housing — more than Queens’ 903,000 square feet
• Office spaces with high potential for residential conversions are present in 63 neighborhoods
• 10 neighborhoods hold 74% of conversion-feasible NYC office space; Central Midtown leads with 15% of the city’s prime convertible office square footage
• $5.75B in mortgages tied to prime candidates for office-to-residential conversions are set to mature between 2025 and 2027, with $1B due next year in just five neighborhoods — Central Midtown, SoHo, Chelsea, NoMad & Turtle Bay
• Passing of the City of Yes for Housing Opportunity program simplifies office-to-residential conversions for top-rated spaces

With many cities increasingly looking at office-to-residential conversions as an avenue for tackling housing shortages and record-high office vacancy rates, we looked at NYC to see how much of the city’s office stock is actually suitable for residential conversion and which neighborhoods could become hotspots for conversions.

In doing so, we found that 85 million square feet of NYC’s office stock has the potential to successfully convert to residential use. As expected, 92% of that space is concentrated in Manhattan.

However, more surprising was the fact that the Bronx has more prime convertible office space than Queens with 1.13 million square feet and 903,000 square feet, respectively. And, while Staten Island is home to only four buildings that qualify as top conversion candidates, Downtown Brooklyn holds 65% of Brooklyn’s easiest-to-convert office space.

Notably, our overall analysis does not take into account in-place legislative barriers. Rather, it analyzes the NYC office landscape from the perspective of its full residential conversion potential and goes one step further than what the City of Yes for Housing Opportunity program proposes.

Can You Convert Any Office Building to Residential Use?

While there is growing governmental support for office-to-residential conversions, not all office properties are created equal in terms of conversion feasibility. Specifically, factors such as the shape and size of the floorplate; ceiling heights; block positioning; walkability; and many more can be conducive to (or hinder) conversions.

PropertyShark’s Conversion Feasibility Index takes these and other factors into consideration to designate NYC office buildings into three tiers: Tier I buildings are considered the most suitable and financially advantageous conversions, whereas Tier III buildings pose major structural, financial and overall feasibility challenges.

How Much Office Space Could You Really Convert in NYC?

Allowing for all of the aforementioned limitations, around 15% of NYC’s office spaces are rated as top conversion candidates with a high likelihood of success (Tier I). That means that only some 85 million square feet of the city’s 571 million square feet of office space is truly feasible for conversion.

A further 34% of the city’s office footprint can be considered quality candidates with good potential, but design and structural restrictions (Tier II). However, more than half (51%) of NYC office space is considered difficult to convert and poses significant limitations that generally make residential reconfiguration challenging and prohibitively expensive (Tier III).

This emphasizes the challenges of the NYC office market, but also the many potential opportunities to create more housing: The city’s best-rated 85 million square feet of office space are spread across 754 buildings, meaning 31% of NYC office buildings are conversion-feasible.

Of that, the vast majority is concentrated in Manhattan, which is home to nearly 79 million square feet of the city’s most convertible office space. That is further demonstrated when zooming down to the neighborhood level: Of the 63 neighborhoods with office buildings that are well-suited for residential conversions, Manhattan claims 36.

It's worth mentioning here that although Manhattan's 16.7% vacancy rate is below the national average, that still leaves some 81 million square feet of office space vacant in the borough.

Top 10 Neighborhoods for Residential Conversions Claim 74% of City’s Prime Convertible Office Space

Considering that Manhattan comprises 85% of the city’s office stock and 92% of NYC’s top convertible office space, Downtown Brooklyn’s appearance among the 10 neighborhoods with the largest volume of successfully convertible office space is significant.

Overall, these 10 neighborhoods total 63 million square feet of the best office space for residential conversion — or nearly 74% of NYC’s top-tier space for office-to-residential conversions.

Additionally, these 10 neighborhoods will see a total of $4 billion in office loans maturing throughout the next three years across their top convertible office buildings, with $952 million in 2025 alone. For context, Manhattan is looking at $5.43 billion in maturities between 2025 and 2027 that are tied to prime convertible office buildings.

1. Central Midtown, Manhattan

Convertible Space: 12,759,239 square feet

Conversion Opportunities: 88

NYC’s largest office market also incorporates the largest amount of prime convertible office space by a significant margin, yet still represents just 14% of the neighborhood’s stock.

At the same time, Central Midtown will see upcoming mortgage maturities totaling $1.13 billion in the next three years alone. That represents 21% of Manhattan loans tied to top office-to-residential conversion candidates in the same period. Even more immediately, Central Midtown will be the setting for 23% of Manhattan loans coming due on prime convertible space.

2. Garment District, Manhattan

Convertible Space: 9,044,867 square feet

Conversion Opportunities: 80

The city’s fifth-largest office market, the Garment District nevertheless comprises 11% of NYC’s top convertible space as 42% of its office buildings are well-suited for residential conversions. It’s worth noting here that although only $10.5 million in office mortgage loans are due next year in the Garment District, 2026 will see $282 million in loans mature across office spaces that could be converted to residential use, followed by another $108 million in 2027.

3. NoMad, Manhattan

Convertible Space: 8,510,181 square feet

Conversion Opportunities: 88

Holding about one-third less prime convertible office space than Central Midtown, NoMad has the same number of buildings (88) that are suitable for office-to-residential conversions. That’s because 34% of the neighborhood’s office footprint is well suited for conversion, whereas only 14% of Central Midtown office space is. .

In terms of loan maturities, of the $4.37 billion due on NoMad office spaces throughout the next three years, $561million are tied to top convertible space.

4. Financial District, Manhattan

Convertible Space: 7,923,519 square feet

Conversion Opportunities: 36

The Financial District may be the second-largest office market in the city, but only 12% of its current footprint is well-suited for residential conversions. Even so, the neighborhood is set to see $302 million in loans tied to prime convertible space come due in the next three years: While the next two years will see just $7.5 million in Tier I maturities, the Financial District’s top candidates for office-to-residential conversions will see $294 million in loans come due in 2027.

5. Murray Hill, Manhattan

Convertible Space: 5,770,424 square feet

Conversion Opportunities: 36

Nearly half of Murray Hill office buildings have structural and design features that are favorable for successful residential conversions. Should all prime conversion-amenable buildings convert, the neighborhood’s office stock would drop by 23%. Meanwhile, Murray Hill will see $410 million in mortgages maturities tied to the best-rated conversion candidates, accounting for one-third of all office loans due in the neighborhood during the next three years.

6. Chelsea, Manhattan

Convertible Space: 5,177,235 square feet

Conversion Opportunities: 55

In contrast to Murray Hill, Chelsea’s top conversion candidates account for a much smaller slice of the neighborhood’s maturing mortgages: Here, just 6% of the $5.1 billion in office loans due by the end of 2027 are tied to prime convertible office spaces. This is despite the fact that Chelsea’s top convertible office stock makes up 13% of its office footprint.

7. Flatiron District, Manhattan

Convertible Space: 5,160,440 square feet

Conversion Opportunities: 59

The city’s 12^th-largest office market, the Flatiron District stands out with a particularly large share of convertible space: 46% of its office footprint is top-rated for residential conversion. Tied to some of these prime convertible spaces are $364 million in mortgages maturing throughout the next three years, accounting for 65% of all office loans due on Flatiron District office buildings in the same period.

8. Downtown Brooklyn, Brooklyn

Convertible Space: 2,955,927 square feet

Conversion Opportunities: 22

The only non-Manhattan neighborhood among the 10 neighborhoods with the largest amount of prime convertible space, Downtown Brooklyn has the potential to become one of the city’s hotspots for office-to-residential conversions, holding 65% of Brooklyn’s best-rated convertible office space. At the same time, Downtown Brooklyn is set for $1.36 billion in office loans maturities in the next three years with $231 million of that tied to top-tier convertible office space.

9. Turtle Bay, Manhattan

Convertible Space: 2,931,487 square feet

Conversion Opportunities: 12

Even with only 13% of its office footprint incorporating the architectural and design features best suited for residential conversions, Turtle Bay could nevertheless see close to 3 million square feet in office-to-residential conversions. Although the neighborhood is facing $1.2 billion in office loan maturities throughout the next three years, only $100 million of that total is tied to the best-rated conversion-feasible spaces.

10. Theatre District-Times Square, Manhattan

Convertible Space: 2,755,130 square feet

Conversion Opportunities: 20

Despite being the third-largest office market in the city, only 5% of the Theatre District-Times Square area’s office footprint is well-suited for residential conversions.

Similarly, top-tier conversion candidates hold little of the neighborhood’s loans that will come due in the next three years: The $246 million tied to some of the area’s most conversion-compatible office spaces represents just 3% of the neighborhood’s office loan maturities during the same period ($8.43 billion).

Downtown Brooklyn Holds 65% of Borough’s Prime Convertible Office Space

As expected, Brooklyn has the second-largest volume of convertible office space among NYC’s boroughs with 4.5 million square feet or 5.3% of the city’s best-rated conversion-feasible office space. That also means that seven Manhattan neighborhoods individually hold more prime convertible office stock than the entirety of Brooklyn.  

Overall, 11% of Brooklyn office space is top-rated for residential conversion. That space is divided among 45 buildings with half located in Downtown Brooklyn — the only location outside of Manhattan to rank among the city’s top 10 neighborhoods for office-to-residential conversions. In fact, Downtown Brooklyn holds 65% or 3 million square feet of the borough’s prime convertible office space.

Brooklyn Heights has the next-highest amount of highly convertible office space in the borough with 742,000 square feet or 16% of Brooklyn’s stock. What makes this neighborhood truly stand out is that Brooklyn Heights is the only NYC neighborhood where the entire office stock could be successfully redeveloped to residential use.

The Bronx Home to More Convertible Office Space Than Queens

With more than 1.13 million square feet of top-rated convertible office space, the Bronx has the potential to see more office-to-residential initiatives than Queens, which has only 903,000 square feet of prime convertible space. Overall, only 3% of office square footage in Queens presents the best structural and design features that make for successful residential conversions.

Queens’ potential office-to-residential conversion hotspots are Jamaica, Downtown Flushing and Forest Hills, which collectively hold 711 million square feet of the most suitable office stock for residential reuse. In terms of loan maturities tied to prime convertible office space, Queens only has $11 million due in the next three years.

Meanwhile, by the end of 2027, the Bronx will see $39 million in office loans mature. These loans are concentrated in just three neighborhoods — Mott Haven, Wakefield and Tremont. Yet, these neighborhoods combined hold less prime convertible office space than Port Morris, which has the largest volume in the Bronx with 322,000 square feet.

Concourse Village is the borough’s next potential hotspot for adaptive reuse office projects with 252,000 square feet of the city’s best-rated convertible office space. It’s followed by Melrose, which could see 146,000 square feet turn to residential use.

City of Yes for Housing Opportunity Influence on Conversion Eligibility

Considering the changes proposed by the just-approved City of Yes for Housing Opportunity program, we also took a quick snapshot of the city’s office stock by age. finding that all but 120,000 square feet of NYC’s prime convertible office space was built before 1991.

Specifically, of the 85 million square feet of NYC office space best-suited for residential conversion, 77 million square feet (91%) was constructed before 1962, while a further 8 million square feet (9%) was built between 1962 and 1991. In fact, all prime convertible office buildings in the Bronx were built prior to 1962, while Brooklyn stands out with nearly one-quarter of its top convertible office stock completed between 1962 and 1990.

Of course, the biggest effect would be in Manhattan, since the borough holds 72 million square feet of the top conversion-compatible office space built before 1962. An additional 6.7 million square feet of Manhattan’s prime convertible space was developed between 1962 and 1990. That’s slightly more than all the convertible office space available in all of the other four boroughs combined, regardless of year built.

63 NYC Neighborhoods Hold Top-Rated Convertible Office Space

Explore the interactive table below to see office space distribution by convertibility across the 63 neighborhoods that feature NYC's best-rated office space for residential conversions:

Methodology

The Conversion Feasibility Index works by assigning property-level scores for office buildings, taking into account a wide range of property characteristics that all have a significant impact on the potential for conversion, including building characteristics, architectural features and location.

Each feature receives a weighted score based on its importance and impact on a potential office-to-residential conversion. The points are then added to determine the property’s Conversion Feasibility Index. The higher the score, the higher the property’s likelihood for a successful conversion:

• Tier I: 90-100 points
• Tier II: 75-89 points 
• Tier III: 0-74 points

Using the Conversion Feasibility Index assigned to each building, we extracted neighborhood- and borough-level conversion feasibility data. Neighborhood boundaries were established in accordance with PropertyShark map boundaries.

Neighborhood-level mortgage data was provided by Yardi Matrix and then matched in accordance with PropertyShark neighborhood boundaries.

Buildings with no current CFI scoring were excluded from this study.

Disclaimer

This article is intended for educational and information purposes only and should not be construed as investment advice.