A structural scare at one of the largest office-to-residential conversion projects in the United States has put the spotlight on adaptive reuse, but experts say the incident is unlikely to derail a development trend that many cities see as key to addressing housing shortages.
The concerns emerged on July 7, when emergency crews were called to the former Pfizer headquarters at 235 East 42nd Street in Midtown Manhattan after workers reported signs that parts of the building could be at risk of collapse.
The 37-storey office tower, currently being converted into apartments, was evacuated along with neighbouring buildings. Streets around Grand Central Terminal were closed, disrupting traffic during the morning rush.
Inspectors later found that a steel beam on the 21st floor had been compromised. New York City fire officials also reported that two internal support columns were buckling and that several upper floors were showing signs of sagging.
Cliff Johnsen of Steamfitters Local 638 described the situation by saying the building’s north side appeared to be crumbling, with steel beams bending under pressure.
By the evening, New York City Buildings Commissioner Ahmed Tigani confirmed the structure had been stabilized and said officials were confident in the emergency response, although some restrictions around the site were expected to remain in place for several days.
The project, led by Metro Loft and David Werner Real Estate, began in 2024 and is widely considered the largest office-to-residential conversion in the United States. Once completed, it is expected to deliver 1,602 apartments, including 400 affordable housing units, along with retail space and amenities such as a rooftop pool.
Its complexity goes well beyond a typical conversion. The development combines two office buildings from different eras—one dating back to the early 1900s and another built in the 1960s—while also adding roughly 30 new storeys above the older structure.
The incident has prompted renewed discussion about the risks involved in converting aging office buildings into housing. However, structural engineers and real estate specialists say there is no evidence that the problem reflects a flaw in the conversion concept itself.
Ben Schafer, a structural engineering professor at Johns Hopkins University, said the event does not challenge current engineering knowledge surrounding adaptive reuse. Techniques such as introducing new load-bearing systems into older buildings and transferring loads safely to existing foundations are already well understood, he explained.
Although investigators have not yet determined the exact cause of the structural failure, experts believe it was likely linked to construction-specific issues, such as temporary loading conditions, design errors, incorrect assumptions or construction mistakes, rather than any fundamental weakness in office-to-residential conversions.
These projects still have a lot of support, on both environmental and economic grounds.
Reusing existing buildings avoids large amounts of demolition waste and reduces the need for new construction, a sector responsible for roughly 40% of global energy-related carbon emissions. Schafer described demolishing existing buildings as a sustainability setback.
Conversions also make financial sense in dense cities, where demolishing large office towers and rebuilding from scratch can be prohibitively expensive.
Many North American cities now see office conversions as an important way to increase housing supply while bringing new life to downtown districts.
Joshua Harris, of Fordham University’s Real Estate Institute, compared these projects to highly complex surgical procedures performed on aging buildings. While setbacks may occasionally occur, he argued they are part of tackling the broader housing shortage.
New York City Mayor Zohran Mamdani also said the episode should not be considered an inevitable result of converting office buildings into homes.
He said a full investigation would determine what went wrong, adding that the city remains committed to supporting office-to-residential conversions while ensuring they are carried out safely and with full accountability.
The incident has also drawn attention to other issues surrounding the Pfizer project.
According to The New Yorker, the development relied on very little organized labour, prompting criticism from Steamfitters Local 638, the only union represented on the site.
Questions have also been raised about the previous safety record of Domani Inspection Services, the private inspection agency responsible for certifying structural work, including steel welding and high-strength bolting.
Structural issues have also ignited a debate over the long-term market value of the project’s 1,600 planned apartments.
Legal experts say the incident will probably lead to major litigation. Trent Cotney, a partner at Adams & Reese, called the project a “widow maker,” and Dan Rosenberg, principal at Much Shelist, said he expects a long legal battle over responsibility.
Even if the Pfizer project turns out to be an exception, many believe it will set a precedent for future development. Experts expect more intense regulatory scrutiny, more rigorous engineering assessments prior to financing approval, higher insurance costs and greater caution around highly complex conversion projects with major structural additions.
Rather than slowing the office-to-residential market, the incident is widely expected to encourage stronger oversight and more conservative project planning, reinforcing confidence in a sector that continues to play an important role in addressing housing shortages.
