Answer extracted from the Coffee & Cap Rates: Commercial Real Estate Podcast — listen to the full episode below.
How many office-to-residential conversion units are currently in New York's pipeline?
Approximately 16,000 units are currently in the office-to-residential conversion pipeline across New York City, representing a significant asset class transformation driven by 65 separate transactions over the past two years. This scale of activity demonstrates how capital is shifting toward mixed-use redevelopment as traditional office space adapts to changing market demands.
The office-to-residential conversion market has emerged as one of the most compelling investment opportunities in New York's real estate landscape. As discussed in the Coffee & Cap Rates episode, this transformation reflects a broader trend where capital is flowing toward assets that align with changing fundamentals and policy support.
A Pipeline Driven by Market Fundamentals
The 16,000-unit pipeline represents far more than raw supply numbers. Each conversion requires sophisticated execution, from securing the right asset basis through careful financial structuring. The 65 transactions that traded during this period illustrate both the breadth of investor interest and the maturity of the conversion model as an investment category.
101 Greenwich serves as a notable example of this asset class momentum, showcasing how landmark office buildings are successfully repositioned into residential uses. These conversions appeal to institutional investors precisely because they combine reset valuations with growing residential fundamentals—the very combination Shkury identifies as the key to capital allocation in 2026.
The conversion pipeline reflects a strategic response to New York's housing shortage. As referenced in this segment of the podcast, approximately 60,000 housing units per year are needed to address the city's supply gap, yet only roughly 30,000 units are currently being produced annually. Office-to-residential conversions help bridge this gap while utilizing existing infrastructure in prime locations.
"Capital is investing in reset valuations, in fundamentals that are growing, in policy alignments. When all of those don't exist, capital is looking for distress and basis."
Shimon Shkury — Principal at Ariel Property Advisors. Shkury is a commercial real estate investment sales professional specializing in New York City's multifamily, office, and retail markets. He has closed numerous high-value transactions including Section 8 affordable housing and office-to-residential conversion projects across Manhattan, giving him direct insight into how institutional and private capital is deploying across these transformative asset classes.
What makes the office-to-residential conversion pipeline particularly attractive is its alignment with New York City's policy environment and market fundamentals. Unlike distressed office-only assets, these conversions create new residential supply in neighborhoods with strong demand, making them compelling for both large institutional investors and value-add operators alike.
For a deeper look at how the broader office market is performing and which asset classes are attracting the most capital in 2026, the full episode dives into office performance trends and the hierarchy of investment opportunities across different property types.
See also
Which office asset classes performed strongest in commercial real estate investment during the first half of 2026?
Class A office, Class B office being repositioned, and office-to-residential conversions were the three main performing categories. Class A office saw 23 million square feet of leasing activity and strong capital deployment throughout the period.
How much value have rent-stabilized apartment buildings lost compared to their 2018 peak?
Rent-stabilized buildings that traded in the past six months show an average discount of 63% compared to their previous trading prices. The Pinnacle bankruptcy sale for $451 million—60% below its 2018 valuation—exemplified this severe erosion.
What structural challenges affect rent-stabilized multifamily housing in New York City?
Rent-stabilized multifamily faces severe misalignment: rents provide minimal returns with no ability to increase through subsidies or tax abatements, while the Rent Guideline Board's recent 0% rent growth decision has deepened financial distress across the sector.