M
anhattan’s office‑to‑residence shift accelerated last year, with twice as much space converted into apartments as in 2022. The trend is reshaping Midtown, traditionally dominated by office towers, hotels and entertainment venues. Key projects include several Third Avenue buildings in the East 40s and 50s, 135 E. 57th St. at Lexington, and the 5 Times Square complex, now slated for 1,250 units. These conversions inject 24/7 life into blocks that usually quiet after dark, while the Times Square project may soften the area’s frenetic pace.

    A Cushman & Wakefield study, cited by the Commercial Observer, reports 3.3 million sq ft of conversion work underway in 2024, up from 1.6 million the year before. By August, the total had risen to 4.1 million sq ft. The wave addresses New York’s chronic rental shortage and the rapid obsolescence of older office buildings. Policy drivers—city rezoning and state tax incentives—have made conversions viable where they were previously barred. The Midtown South rezoning, approved last summer, spurred a 12‑story building at 29 W. 35th St. to be turned into 100 studio apartments.

    Converted units enjoy popularity comparable to new construction, says market analyst Jonathan Miller. The inventory decline is evident: Manhattan’s office space fell from 466.1 million sq ft in Q2 to 449.4 million sq ft in Q3, per Savills. While pre‑2020 conversions focused on Lower Manhattan’s older structures, the current wave targets Midtown. Projects include 25 Water St., offering 1,230 rental units, and SL Green’s 600‑unit development at 750 Third Ave. The former Pfizer headquarters on Third Avenue and East 42nd St. will host 1,602 new rentals, featuring 100,000 sq ft of amenities such as a rooftop pool. Vanbarton secured a $300 million loan from Brookfield to convert 6 E. 43rd St. into 441 units. Rudin plans major East Side conversions at 845 Third Ave. and 355 Lexington Ave.