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September 8, 2025 | Media Coverage

Michael Scott, Nutter’s co-managing partner, and Jon Popin, a partner in the firm’s Real Estate Department, discussed trends happening in the New York, San Francisco, and Boston office markets in Bisnow. In the article, “A Tale of Three Cities: Exploring Boston, SF and NYC’s Office Markets, Their Plans for Development and What They Mean for the Future,” Michael addressed the Q1 2025 office numbers in each city as well as some of the key policies they have in place to encourage development, and what those policies may mean for the future of commercial real estate.

New York is working on a rezoning proposal, the Midtown South Mixed-Use Plan, that would allow large swaths of the neighborhood to be converted into residential housing. “The Midtown South Mixed-Use Plan is a significant update to zoning, allowing new residential housing in Midtown that encourages adaptive reuse of existing building stock and allows for meaningful density,” Michael said. “This plan should provide a more vibrant mix of uses in Midtown, and, with the enactment of 467-m, a new exemption from the city’s property tax for office-to-residential conversions, it will provide an alignment of economic incentives for more office-to-residential conversion projects.” 

Jon added, “It will be the first time that decades-old Manhattan industrial areas will allow for badly needed residential development. It will also implement for the first time newly created zoning districts that will allow residential towers of up to 18 FAR. This exciting change to New York City’s Zoning Resolution will serve to bring much-needed housing to an area of the city that has historically focused on solely commercial and industrial uses.”

In San Francisco, Michael pointed out that although activity has increased, it continues to have the highest vacancy rate in the country at 34.8%, as compared to 16% in New York. "San Francisco has recently enacted programs aimed at increasing conversions, such as waiving inclusionary housing requirements and impact fees up to 7M SF of converted space, waiving transfer tax on up to 5M SF of converted space, and other measures related to clarifying building and fire codes and streamlining permitting. Clearly, more is needed in San Francisco to encourage developers to undertake conversion projects,” said Michael.

The Boston office market also saw a partial uptick in Q1 2025, but its growth appears to be less robust than New York and San Francisco. Michael stated, “Policymakers must have a detailed understanding of the financial anatomy of these larger projects so that they have a clear-eyed understanding of the variables needing to be solved to make projects viable.”