Conversion trend of the time: Iconic Manhattan office building turns into apartments

  
                                                                                                                                                                                                                                           NEW feature! Listen to this article as a podcast 

Dozens of derelict office buildings in the world's major cities, standing empty after the pandemic and the breakthrough of hybrid work, are being converted and rebuilt into new desirable housing.

COVID-19 and new working patterns have left the USA's large cities with empty office premises. In June, the US had an average office vacancy of 18.1% - San Francisco had the highest, with 24.8%, while New York had an office vacancy of 20.1% in the first half of 2024.

Since 2021, there has been a significant increase in the conversion of vacant office properties in the US. This trend has continued to grow over the past two years and has reached a record high this year. 

Similarly, many European cities are also seeing a rise in the conversion of abandoned office buildings. A recent German study suggests this conversion could create 60,000 new apartments, housing 102,000 people in the country's seven major cities.

Obsolete and abandoned

The announcement in August that New York's iconic office building, The Flatiron Building, in Manhattan 2026, will reopen its 22 floors with newly designed luxury apartments caused quite a stir.

This famous attraction, dating back to 1902, was declared a National Historic Landmark in 1989. Over the years, it has been visited and photographed by tourists as frequently as the Statue of Liberty and the Brooklyn Bridge.

Since 2021, there has been a significant increase in the conversion of vacant office properties in the US. This trend has continued to grow over the past two years and has reached a record high this year.                                                           Photos: iStock

The 19,000 sqm office building has been vacant since British book publisher Macmillan moved out in 2019. The outdated office space is being repurposed to create 60 high-end condominiums on Fifth Avenue.

The floor plans' distinctive features will result in more spacious apartments compared to other office conversions completed this year. 

Most office conversions

In the United States, Washington DC and New York compete this year to generate the most office conversions. The federal capital plans to convert disused office space into approximately 6,000 apartments while New York develops over 5,200 new housing units. 

One major contributor to New York's conversion efforts is the rebuilding of JPMorgan Chase's former office tower at 25 Water Street in Manhattan into a whopping 1,263 apartments - the largest conversion projectogits kind in the US.

In New York, empty office space is expected to be converted into 5,200 apartments this year. Of these, 1,263 apartments will be sold in the former office tower of the financial group JPMorgan Chase at 25 Water Street in Manhattan.

Many office conversions into housing can be most costly and complex due to the different interior layouts of office and apartment buildings.

With the ongoing housing shortage in the US and declining demand for office space, however, converting buildings could be a lifeline for struggling real estate investors who must accept this dramatic but inevitable reshaping of urban real estate in a post-pandemic world.  ●

Read more:
Nypost.com: One of NYC’s most photographed landmarks is going residential
Nypost.com: A billion square feet of new housing space to emerge in cities
Time.com: A record number of office buildings converting into apartments
Us.jll.com: Office conversions reach new record volume for 2024