Peter Grant

We're back Monday night.

In the current office downturn, there are many midtown buildings that are facing very high vacancy.

So buildings you never would have thought of as apartment buildings are being considered for these types of conversions.

Well, there are three major things that need to line up for office to residential conversions to make sense.

One is that the office market has to deteriorate to the point where you can buy the buildings cheap enough that a conversion is economically viable.

Number two, you generally need help from the city and state for zoning changes, as well as some tax incentives.

And number three, you need a strong residential market.

All three of those stars have lined up for New York.

And as well as the fourth one, architects and developers are getting very creative now that they have a lot more office buildings to work with.

If you have a big sprawling office floor, in the middle, you're not going to get enough light.

You're not going to get enough air for it to be an apartment.

It's just not going to work.

And what they've done is they've gotten very creative about the way they can carve out spaces

To provide light and air, the main point is to take floors that are too wide for residential and make them less wide.

They'll actually block the space off in the center of the building and take that space, that floor area, and move it elsewhere.

The first big conversion trend took place in the 1990s.

The city created special zoning and tax incentives for downtown conversions.

In the current office downturn, there are many midtown buildings that are facing very high vacancy.

And the city and the state have responded by expanding a lot of these incentives to midtown.

And developers are taking advantage of it.