The neighborhood in New York where families fill empty offices

For all the talk about converting New York City’s languishing office buildings housing, only one neighborhood has done this on a large scale: the Financial District.

In recent years, luxury apartments have been carved out of a 1907 office tower at 84 William Street and an Art Deco skyscraper at 1 Wall Street, once the headquarters of the Bank of New York. Five other office buildings are being gutted and converted into housing, including a project that is the largest such conversion in the United States.

But the high-rise renovations are just part of a wave of redevelopment in the area that began decades ago with the transformation of low-rise buildings and continues today with massive glass and steel towers.

The financial district’s name has become a misnomer as the neighborhood, once derided as a desert after the bankers went home, becomes a vibrant residential enclave at the southern tip of Manhattan.

There are now 66,000 residents, up from 13,700 in 1990, in the area roughly bounded by Chambers Street and the Brooklyn Bridge to the north and the West Side Highway to the west. There’s even a new Whole Foods.

The financial district’s shift offers a road map and a glimmer of hope for what could happen in neighborhoods from Lower Manhattan to Midtown Manhattan, which have been saddled with a glut of empty offices as companies continue to cut back on space in the wake of the pandemic. Real estate analysts predict that a large proportion of buildings – especially decades-old offices with outdated layouts – will remain unattractive to most companies and will have to find other uses.

Mayor Eric Adams and Governor Kathy Hochul have spoken out in favor of residential renovations as a solution to both the office surplus and another major problem: the city’s housing shortage. But few buildings make the change. Such modifications can be expensive and impractical, given the difficulty of creating light-filled homes from dark, deep interiors.

The financial district’s transformation emerged from two setbacks—the exodus of banks and insurance companies from Lower Manhattan to Midtown, and the September 11 attack—that have resulted in 9-to-5 eligible workers being steadily replaced by parents who pushing strollers. .

The area’s compact lots created a predominance of slender buildings with high ceilings and large windows, making renovations easier.

Since the start of the pandemic, nearly 1,500 homes have been added to the area in new buildings and renovations. Thousands more are expected in coming years, including in what is believed to be the nation’s largest conversion: 1,300 apartments in an office tower to be vacated by JPMorgan Chase in early 2021.

Cory Levy, 26, said he has long been fascinated by the charm of the financial district, such as its short streets that hark back to when the Dutch settled the area as New Amsterdam, before Manhattan was laid out on a grid.

Still, friends warned him not to move there.

“They said it was a ghost town,” Mr. Levy said.

He decided to take a look after work and visited a rooftop bar, restaurants and coffee shops.

“It’s not the East Village,” he said, “but it is a residential area, and if you like to go out late at night and do things, there are places to eat and drink.”

He loved the area and in April signed a lease on an apartment with his girlfriend, a one-bedroom apartment in a 57-story former office tower that was converted in 2008.

Mr Levy said the area had major advantages over other neighbourhoods. About half of the city’s subway lines stop nearby, as do several ferries and the PATH train to New Jersey. There are drawbacks, he acknowledged: Sunlight can be hard to find in the narrow hallways.

The financial district’s makeover began in the mid-1990s, when the office market faced similar challenges. As vacancies increased, state lawmakers approved tax breaks for developers who converted languishing office towers into housing. A construction boom followed.

By the time incentives expired in 2006, nearly 13,000 units had been created. This is evident from an analysis by the Citizens Budget Commission. Before 1990, the area totaled about 7,400 homes, according to the Downtown Alliance, a nonprofit that manages the local business improvement district.

Office conversions continued even after the stimulus expired, but at a slower pace. Joey Chilelli, managing director at Vanbarton Group, a real estate company, predicted that the latest blow to the office market would most likely lead to more conversions in the financial district, also known as FiDi.

According to the newspaper, the neighborhood has the highest office vacancy rate in Manhattan real estate company Colliers. Nearly 27 percent of office space is for rent, the group says, up from 11 percent before the pandemic.

Vanbarton Group is redeveloping and creating the latest renovation in the area 588 apartments at Waterstraat 160. The company purchased the property in 2014 and planned to keep it as an office until the pandemic hit. Apartment rentals start this winter.

“A lot of buildings down there are ripe for renovation,” Mr. Chilelli said. “There will be a continued march forward as people discover that FiDi is actually a great place to live.”

Over the years, some of the city’s earliest skyscrapers, including 15 Park Row, have become residential properties. But so do many modern office buildings that struggled to retain corporate tenants in the 1980s and 1990s, including 90 William Street, near the Federal Reserve Bank of New York.

Ruth Cheng was one of the first tenants to move into 90 William Street in 2008, purchasing a condominium with her husband after visiting a sample unit. They raised two children there until they had a third and needed more space.

“We didn’t even look elsewhere,” said Ms. Cheng, 49, adding that her children’s schools were nearby. “We wanted to stay with FiDi.” The family now lives in a new building two blocks away.

During the family’s 15 years in the area, multiple schools opened, as did new restaurants and shops, including at the nearby South Street Seaport. One of the newest stores in the neighborhood is Best Sicily Bottega, an Italian cafe and grocery store on Beaver Street.

The store’s founders, Silvia Lombardo and Nicolas Calia, met via Instagram during the pandemic and discovered that they both lived in the financial district and had grown up ten minutes apart in Sicily. When they met, Ms. Lombardo had an online store that sold Italian products, but she wanted to display them in a physical store, along with food items such as olive oil cakes and meatballs made from her family’s recipes.

With their shared love of Sicily and food, they opened the store across the street from Ms. Lombardo’s apartment in May. They said they had not thought about opening elsewhere and had decided to stay open after hours to serve local residents takeaway food, such as pasta on Fridays.

“We really believe that something is changing here,” Ms. Lombardo said.