Davis Polk Real Estate practice co-heads Brian Lichter and Michael Rishty were quoted in Law360 discussing trends they are watching in 2025 around New York City real estate development.

Michael shared that he has noticed more interest in office-to-residential conversions. “We have seen more conversions this year than prior years, and I expect that will continue just because you need to do something with the assets,” he said.  

The article noted that there are some policies that are aimed at driving new development, but they might not entirely offset the high cost of financing. 

“There are the macroeconomic numbers, interest rates and the cost of development, and then incentives, including state tax breaks,” Michael said, “But they still need to converge to a place that pencils out.”

Brian pointed out that while individual deals are taking longer, he is seeing green shoots in more term sheets. “The market is improving, but we’re still not back to the levels of activity we’d like to see,” he said. “Because of that, the universe of lenders active in the space is lower than it used to be, and you have new players.”

“NYC Development Projects To Watch In 2025,” Law360 Real Estate Authority (January 8, 2025) (subscription required)

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