New York City Office Market Report

Office-to-residential conversions bring tailwinds. New York City continues to promote office-to-residential conversions as a key strategy to address housing affordability challenges. In the first half of 2026, nearly 40 percent of newly permitted housing units came from conversion projects, up from roughly 20 percent in 2025. Conversion activity is also evolving, shifting from Downtown Manhattan to Midtown and increasingly involving Class A assets rather than primarily Class B and C properties. With about 10 million square feet of office space in the conversion pipeline, including planned and proposed projects, removing obsolete inventory is gradually tightening market conditions.