The Manhattan Office Conversion Pipeline: What's Actually Happening
Beyond the headlines, a practical assessment of which conversions are moving forward, which are stalled, and what separates success from failure.
Office-to-residential conversion has been the topic du jour since remote work reshaped demand. But converting headlines into closed deals requires understanding the real constraints.
What's Actually Converting
- Pre-war buildings with smaller floor plates and generous window lines
- Buildings acquired at significant discounts to replacement cost
- Locations with residential demand regardless of market conditions
- Sponsors with conversion experience and patient capital
The 467-m Tax Abatement Factor
The 35-year tax abatement fundamentally changes conversion economics. Projects that pencil without it are rare; projects that pencil with it require hitting strict timeline requirements.
Lessons from Active Projects
Our work on multiple conversion advisory engagements shows that building selection is 80% of the battle. The right building in the wrong hands fails; the wrong building in the best hands still fails.
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