Over 6.5 million square feet of Manhattan office space have disappeared in the past four years, mainly due to residential conversions. This shift is reducing office availability, with Midtown seeing its highest absorption since 2005 and Downtown showing steady improvement despite slow leasing.

Office-to-residential conversions have picked up pace since 2021, with over 1.5 million square feet converted annually in 2022 and 2023, and more expected in 2024.

Currently, 93 million square feet of office space remain available, significantly more than the 52 million in 2019. As companies downsize, experts suggest converting older offices into housing or modern workspaces to address the city’s housing shortage.

Notable projects include conversions of iconic buildings into luxury residences and mixed-use spaces, with Midtown seeing an increase in these transformations. Future conversions could reach tens of millions of square feet, driven by rezoning efforts and the “City of Yes” initiative, which supports housing expansion.

(source: therealdeal.com, picture: Night Nick)