One idea to use the vast amount of empty office space in Manhattan is for rezoning – to affordable housing. This transformation is not unfamiliar to New York; the 420-g program added 25,000 residential units to lower Manhattan in the 1990s. Today, the focus is on affordable housing.
The conversion is not easy. Developers will be persuaded only with massive tax breaks and a large drop in office prices. This transformation may be more sensible for class B and C office space which has been greatly impacted by Covid-19. Class A office space has weathered the storm better and the economics to convert are less appealing.
This potential transformation is not cheap and with New York facing massive revenue shortfalls is it ready to give another tax break? Not in this environment.
The abundance of office space will call for creative strategies. Contact GE Grace @ 646-312-6800 or Grace@GeGrace.com when considering repositioning your office building.