Office Conversion
Calculator
Analyze the financial feasibility of converting underperforming office buildings to residential use. Calculate return on cost, value creation, and tax benefits under NYC's 467-m and 421-a programs.
Building Information
Current Office Economics
Conversion Parameters
Tax Incentive Programs
Office-to-residential conversion program
Additional affordable housing incentives
Enter Building Details
Fill in the building information and conversion parameters to analyze the feasibility of an office-to-residential conversion.
NYC Office-to-Residential Conversion Guide
Why Convert Office to Residential?
Manhattan's office market faces structural challenges with remote work reducing demand while the housing shortage intensifies. Many older Class B and C office buildings now trade at significant discounts, creating opportunities to convert to residential at attractive returns. The city has introduced incentive programs to encourage these conversions and add needed housing.
467-m Tax Abatement Program
NYC's 467-m program provides significant property tax abatements for office-to-residential conversions. Key benefits include:
- •Up to 90% property tax abatement in early years
- •Abatement period can extend 35 years
- •Buildings must have been primarily office before December 31, 1990
- •Affordable housing requirements vary by location
Ideal Building Characteristics
Conversion Cost Factors
- •Core & Shell: $150-200/SF for basic residential conversion
- •MEP Systems: $75-125/SF for new residential mechanical, electrical, plumbing
- •Unit Fit-Out: $50-100/SF for kitchens, bathrooms, finishes
- •Soft Costs: 15-20% of hard costs for architecture, permits, fees
- •Total Range: $200-400/SF depending on building condition and finishes
Frequently Asked Questions
Which office buildings are best for residential conversion?
Ideal candidates are pre-1990 office buildings with 8,000-15,000 SF floor plates, good window lines, and 9'+ floor-to-floor heights. Buildings with central cores work better than side-core layouts. Location in residential neighborhoods or mixed-use districts simplifies zoning.
How long does an office-to-residential conversion take?
Typical conversion timelines run 18-36 months from acquisition to stabilization. Design and permitting takes 6-12 months, construction 12-24 months, and lease-up 3-6 months. Complex projects or those requiring zoning changes may take longer.
What returns do office conversion projects target?
Developers typically target 15-25% unlevered IRRs and 5.5-7% yields on cost for conversion projects. The discount on office acquisitions, combined with the residential rent premium, should generate 15-30% profit margins on total investment to justify the execution risk.
What are the affordable housing requirements?
467-m typically requires 20-30% affordable units depending on location and specific program terms. Affordable units are rent-restricted based on Area Median Income (AMI) levels. Additional programs like 421-a may provide further benefits with different affordability tiers.