Office-to-Apartment Conversions Hit a Milestone in New York—Here’s What Investors Should Know About Them
Summary
New York City is seeing a surge in office-to-residential conversions, driven by zoning changes and financial incentives. Hosts and investors should be aware of the structural, mechanical, and regulatory complexities of these conversions, but also consider debt-based investing to gain exposure without the operational burdens.
Key Insights
- •Apartment conversions involve extensive mechanical and plumbing overhauls, requiring re-engineering of entire water, HVAC, and electrical systems for multifamily code compliance.
- •New York City's zoning amendments are expanding eligibility for residential conversions, particularly south of 60th Street, and the Midtown South rezoning plan aims to relax restrictions on residential conversions.
- •Financing for office-to-residential conversions is made easier by the 467-m tax abatement introduced in the New York State 2025 budget, offering potential savings up to 90% for up to 35 years.
Action Items
- ✓Consider the complexities of office-to-residential conversions including structural changes, compliance with regulations like the ADA, and overhauling mechanical and plumbing systems when considering property investments or market trends.Effort: highImpact: medium
Tools & Resources
- →Connect Invest: Through Connect Invest, investors can participate in real-estate-backed notes, secured, short-term debt positions.(Connect Invest)
Common Mistakes
- ⚠Failing to account for the structural, mechanical, and compliance complexities of converting office buildings to residential units could lead to significant financial and legal challenges.
More from Regulations & Compliance
The Green Bay City Council is set to vote on new short-term rental rules, which will likely impact local hosts. Details about the specific regulations are not yet known, but hosts should prepare to understand and adapt to the changes. Stay informed about the upcoming vote.
This article discusses the need for housebuilding to address temporary accommodation challenges. It argues that short-term solutions are not enough and should be supported by building more houses. This highlights the ongoing debate about housing affordability and its relationship to the STR market.
Hawaii's hotel industry and the governor are seeking to eliminate 30,000 vacation rentals. This move reflects ongoing tension between traditional hotels and the rapidly expanding short-term rental market. The potential reduction could reshape Hawaii's tourism landscape and affect rental income for hosts, alongside a shift in tourism economics.
Curated by Learn STR by GoStudioM