The appetite for office-to-residential developments is continuing in Manhattan, according to a report from Cushman & Wakefield.
In 2025 alone, such transformation starts totaled five million square feet, the highest annual total seen in two decades, said the brokerage. However, that's nothing compared to what's expected to come. Cushman & Wakefield said that 9.8 million square feet of office space is now planned for conversion, which includes nine new projects totaling two million square feet alone.
"Of the buildings currently proposed for conversion, 51.6% are in Midtown, up from just 23.4% prior to the pandemic," Cushman & Wakefield said.
Meanwhile, Midtown South is home to the least amount of space concentrated in the proposed pipeline (9.7 percent), followed by Downtown at 38.7 percent.
However, it's important to note that proposals for conversions don't always guarantee development. For example, Cushman & Wakefield noted that two sites (625 Madison Avenue and 623 Fifth Avenue) have shifted to office redevelopment due to the "robust demand" seen in the Madison/Fifth submarket.
Also, there has been a notable shift to higher quality product. Class A now makes up 51.6 percent of the total office proposed conversions, well up from the 5.5 percent average recorded between 2004 and 2019. Of the 12 proposed Class A office conversions in Midtown, Cushman & Wakefield said eight of them would break the ground in the West Side and East Side/UN submarkets.
In terms of recent developments for office conversions, RXR, along with partner Apollo, has closed on $500 million in funding to convert a 33-story tower into 796 residential units. RXR is also working on transforming 1.1 million square foot 5 Times Square into as many as 1,200 residential units. Plus, there's the former Pfizer headquarters, at 219 and 235 East 42nd Street, with Metro Loft Management and David Werner Real Estate Investments securing a $720 million loan for the project last year. RXR has also been involved with the transformation efforts there.
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