The Evolution of New York City's Commercial Real Estate Market

Industry News
Jul 21
2 min read

Updated: Sep 4

Office-to-Residential Conversions: A Transformative Trend

New York City’s commercial real estate market is evolving faster than ever. A recent report from Comptroller Brad Lander confirms what many in the field already know: office-to-residential conversions are reshaping the city’s future. The first wave of these conversions is driven by changing demand, remote work, and bold new tax incentives. This shift could deliver over 17,000 new apartments, repurposing more than 15 million square feet of office space. At Skyline Properties, we’re proud to be at the forefront of this transformation.

We recently brokered two key office-to-residential transactions that exemplify this trend:

🔹 101 Greenwich Street – A landmark 26-story Financial District office tower is now being converted into residential use. (*https://www.skylineprp.com/101greenwich BGO Quantum Pacific Commercial Observer

🔹 6 East 43rd Street – Located just off Fifth Avenue in Midtown, this office asset is being transformed into a full-service hotel with extended stay capabilities. This meets the growing demand for hybrid residential-hospitality offerings. (*https://www.skylineprp.com/6e43 Vanbarton Group LLC The Real Deal

These transactions are not isolated; they represent a citywide trend of repurposing underused office space into productive, income-generating assets.

A 45% Market Reset – and a New Window for Opportunity

According to the Comptroller’s report, the average price per square foot for converted office properties has dropped from $500 pre-2020 to just $276 today—a staggering 45% decrease. In some cases, values have fallen even more sharply:

📉 222 Broadway: -71%
📉 100 Wall Street: -57%
📉 101 Greenwich Street (our deal): -29%

While some may see this as a sign of distress, we view it as an opportunity. These pricing resets are opening the door for well-capitalized investors and creative developers to unlock long-term value.

This table shows transaction data for rental conversions before and since 2020.

Policy Is Now On Our Side

This momentum is fueled by smart legislation. The 2024 launch of the 467-m tax incentive—which offers up to 90% property tax abatements for conversions with 25% affordable housing—has been a game changer. Removing the 12 FAR cap was equally important, finally allowing developers to build residential buildings at scale.

Yes, the Comptroller estimates this program could cost the city up to $5.1 billion in tax revenue over 37 years. However, that cost comes with a clear return: new housing, job creation, and neighborhood revitalization.

What This Means for Investors and Owners

At Skyline, we don’t just chase listings. We guide our clients through off-market, strategic, and policy-aligned opportunities. Transactions like 101 Greenwich and 6 East 43rd are about more than moving properties—they’re about repositioning New York’s future.

If you own an office building that has lost value, there may be a path forward through residential repositioning. If you're an investor seeking upside in a transitional market, these conversions offer strong fundamentals, long-term rent potential, and now—finally—the legislative support to make the numbers work.