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surge of office conversion projects is underway, adding to Manhattan's rental pipeline that had been depleted by the expiration of the city's main development tax break. Recent deals include Vanbarton Group's plan to convert 77 Water Street into 600 apartments and Bushburg Properties' proposal to turn 80 Pine Street into 500 apartments. These conversions are expected to deliver thousands of new rental units, helping to alleviate Manhattan's housing shortage.

    According to Corcoran Sunshine, office conversions will account for over 40% of the approximately 18,500 market-rate units set to be built in Manhattan between 2023 and 2028. This is a significant increase from previous years, with many developers turning to conversions due to delays in new construction projects. However, some have expressed concerns about the new regulatory scheme, which may impact the number of units delivered.

    The city's incentive program for office conversions has also been implemented, but its tax break expires after 35 years and requires rent-restricted units to remain under regulation indefinitely. Despite these challenges, developers are moving forward with projects, including Nathan Berman's conversion of the former Pfizer headquarters in Midtown into 1,500 rental apartments, the largest office-to-residential conversion ever.