MetroLoft conversion buckling puts $1.6B office-to-residential model at risk

A structural failure at the largest US office-to-residential conversion threatens to slow a $1.6 trillion industry reshaping American downtowns.

Two support columns buckled Tuesday on the 21st floor of the former Pfizer headquarters at 235 East 42nd Street, forcing the evacuation of nine nearby buildings and closing a 10-block zone in Midtown Manhattan. The developer, MetroLoft, said the damage likely stemmed from the added weight of widening about 15 top floors starting on the 22nd floor — a design choice that may not have been properly reinforced at the column bases.

"The additional load that we put on those floors caused those two particular columns to collapse," Nathan Berman, managing principal and founder of MetroLoft, told the Wall Street Journal. "Why those two particular columns and nothing else? We don't know — we're investigating that."

Fire Department officials said steel beams on the 21st and 22nd floors began to "bend and deflect" shortly before 8 a.m., with floors sagging between the 21st and 26th stories. About 130 Fire and EMS personnel responded, and roughly 400 children were evacuated from the Kennedy International School on East 43rd Street. Mayor Zohran Mamdani declared a "frozen zone" from 40th to 45th Streets between First and Third Avenues, urging New Yorkers to avoid the area.

The project, a joint venture between MetroLoft and David Werner with Gensler as architect, is converting the nearly 1.6 million-square-foot complex into more than 1,600 apartments, with about 25 percent classified as affordable. Berman said 95 percent of the structure remains sound and intact, and that the damage was confined to "a small section of one of the two buildings on this site." Emergency beams and columns were being brought to the site to shore up the weakened area once engineers deem it safe to enter.

What the failure means for office conversions

The incident comes as office-to-residential conversions have surged across the US, driven by plummeting commercial property values and generous tax incentives. About two dozen conversion projects are underway in Manhattan alone, totaling roughly 8.8 million square feet, according to industry data. The strategy has become a critical tool for cities grappling with record office vacancy rates — now above 20 percent nationally — and acute housing shortages.

The structural failure introduces a new regulatory risk for developers. The Department of Buildings filed a new complaint Tuesday accusing MetroLoft of conducting excavation beyond or contrary to approved plans. The building already carried 22 violations dating back to 2020, with 13 still active and $39,000 in penalties owed. Ahmed Tigani, the city's buildings commissioner, said the project went through "an extensive, exhaustive review" over the past two years.

John Cetra, co-founder of the architecture firm CetraRuddy, said conversions have become "a massively important source of new housing in New York" but cautioned that the industry must ensure "it never happens again, whatever it is."

The last comparable structural incident in a New York conversion project occurred in 2023, when a partial collapse at a Bronx NYCHA building displaced 100 residents and triggered a citywide review of aging infrastructure. That event led to $50 million in emergency repairs and a 12-month compliance overhaul.

For MetroLoft, the timing is particularly challenging. Leasing at the Pfizer conversion was scheduled to begin this summer, with completion expected in 2027. The project is the largest of its kind in US history, and its fate will be closely watched by developers, lenders and city planners betting on conversions as a solution to the dual crises of empty offices and unaffordable housing.

This article is for informational purposes only and does not constitute investment advice.