➤ Key Highlights
NYC is on track to start ~9.5M SF of office-to-residential conversions in 2026.
That is more than double the prior year’s 4.3M SF; 16,000+ units are in the pipeline.
~2,000 rentals and 317 condos deliver this year.
Rebounding high-end office leasing is thinning the pool of viable Class A conversion candidates.
In Chicago, the 211-unit Millennium on LaSalle was listed to test buyer demand for finished conversions.
➤ The Signal
Tax incentives, rezoning, and depressed values opened a genuine adaptive-reuse window in NYC, and developers are running through it: conversion starts have doubled in a year. But the same office recovery that makes the city investable is quietly removing the raw material — every Class A block that re-leases is a building that will never be converted.
Chicago’s Millennium on LaSalle is the test case for the next question: what is a finished conversion worth to an investment-sales buyer?
➤ Implications
The economics favor moving now. Feedstock is a depleting resource, and the best-located obsolete assets get bid first. Underwrite conversion as a time-limited arbitrage, not a permanent pipeline.
➤ Key Takeaway
The office recovery is closing the conversion window it opened.
Source: CRE Daily · CoStar · CommercialCafe — June 2026
