Office towers once symbolic of Manhattan’s corporate power are increasingly being reimagined as places to live, with the pace of office-to-residential conversions now at its highest level since 2008. Through August, 4.1 million square feet across 15 conversions had begun in 2025, already surpassing last year’s full total of 3.3 million square feet across 10 projects, according to a report from Cushman & Wakefield. That momentum is a sharp contrast to 2023, when only 1.5 million square feet were converted.
Conversions remain rare at the national level, but in New York they have emerged as a critical response to both a glut of outdated office inventory and an undersupply of housing. Manhattan’s office vacancy rate, which peaked at 23.8% in June 2024 before easing to 22.3% by August 2025, has left many landlords looking for alternatives, Cushman & Wakefield reported. At the same time, residential demand remains steady, with CoStar data showing Manhattan’s multifamily vacancy rate hovering at just 3%, according to the Financial Times.
The projects underway range from historic icons to former corporate headquarters. The Flatiron Building is in the process of becoming luxury condominiums, while the former Pfizer headquarters is set to become the city’s largest ever office-to-residential conversion.
The trend marks a clear departure from historic patterns. Between 2004 and 2022, conversions averaged less than 1.2 million square feet annually across about seven buildings. The only exception was 2008, when 4.8 million square feet of space across 32 properties were transitioned. Since the pandemic, however, the scale has accelerated. Cushman & Wakefield noted that since 2024, 20 Manhattan office sales were linked to residential conversion plans or ongoing work.
Submarket dynamics have also shifted. Between 2004 and 2019, Downtown accounted for just over half of all conversions, while Midtown represented about a quarter and Midtown South made up the balance. By contrast, from 2020 through August 2025, Midtown has led with nearly 55% of such projects, Downtown has accounted for about 36% and Midtown South has slipped below 10%.
Still, analysts caution the pipeline may not be endless. Jared Koeck of CoStar told the Financial Times that “most of the low-hanging fruit has been picked,” suggesting that the pool of buildings suitable for residential conversion in Manhattan is becoming increasingly limited.
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