Has the office-to-Resi Crackdown Arrived?

When work stopped at MetroLoft’s residential conversion of the former Pfizer headquarters, real estate held its breath. 

Was this a one-off event caused by a one-off error that led to some of the columns starting to buckle? Or would this cascade into something bigger facing the overall office-to-residential phenomenon that has reenergized much of Manhattan’s ailing commercial building stock?

Early signs point to it possibly being the latter. The Department of Buildings issued a stop work order Tuesday at SL Green’s Midtown residential conversion at 750 Third Avenue. The city briefly ordered workers to halt “all structural steel work” on the ninth floor and above. 

Though no structural distress or danger to the public was ultimately discovered by the agency (which led to it reversing the stop work order), the event itself shows that conversions are in the city’s crosshairs. 

After the MetroLoft debacle, real estate has received mixed messages about the future of office-to-resi. At first, Mayor Zohran Mamdani voiced support for the projects. “Yes, I do continue to consider the conversion of office space into residential space as part of our answer to the housing crisis; I also consider that we have to do so safely and in a way that is fully accountable,” he said at a press conference in early July.

But others have seized on the moment to call for more oversight — and more union labor. “The greatest example of a lack of project labor agreement that we have seen over the last week is on 42nd Street, where I could say that project is not more efficient, is not working and there will be significant delays,” Brendan Griffith, president of the New York City Central Labor Council, said to a city panel a few weeks ago. “Perhaps a unionized workforce throughout that construction may have prevented what thankfully did not end in a loss of life, but it certainly is going to be a delay and posed a tremendous risk.”

For now, construction has resumed at 750 Third Avenue and there has yet to be any official movement in calling for office-to-resi conversion oversight. But if another similar event comes to light soon, we may be entering trend territory. 

That’s not the only thing that happened in New York real estate this week — far from it. Thankfully, below are all the major headlines you may have missed.

Eric Adams’ new job: real estate’s pitchman

The former New York City mayor has a new job: real estate consulting. In an interview with The Real Deal’s publisher Amir Korangy, Eric Adams detailed all of the things he’s been up to since leaving office. He is working as a business development consultant for multiple firms selling rebar, facilities cleaning and more.

Those companies are: MST Rebar, a green rebar company; Cherish, a health monitoring tech company; Opus, a cleaning and concierge services for facilities; WireSight, a traffic enforcement firm; GPOD, a green energy company; DAMPEN, a fire retardant product; DCL Fortress, a construction firm; and an atmospheric water generation company. 

According to Adams, his celebrity status is helping close deals. “When I reach out and say that I’m Eric Adams, they say, ‘Not Mayor Eric Adams,’ and I say, ‘Yes,’” Adams said. “I say, ‘I just want to show you the product.’”

Wading through NYC’s messy pied-à-terre tax rollout

The pied-à-terre tax is here, and things are already rocky.

The Department of Finance sent 17,000 notices to homeowners across the five boroughs whose properties could be subject to the surcharge. And it seems like the agency is taking a very wide approach.

So broad, in fact, that real estate insiders are questioning the city’s methodology. “I was surprised the city didn’t make an effort to determine who owes the tax and who doesn’t,” said Jody Kriss, founder of real estate investor and developer Kriss Capital. “I’m not saying the city could have gotten it perfect, but they could have eliminated a lot of these people.”

In many ways, these notices are bringing up more questions than answers. People are unclear on what makes them possibly on the hook for the tax, and they’re also trying to figure out the most effective way to fight the charge. Right now, homeowners have less than a month to file a dispute with the city.

Some insiders expect that deadline to be extended given the number of notices sent out. They also expect to see some litigation too.

One year after 345 Park shooting, Rudin locked in litigation

It’s been one year since tragedy struck New York City. 

On July 28, 2025, a gunman entered the office tower at 345 Park Avenue, owned by Rudin Management, with an assault rifle. He killed four people: police officer Didarul Islam, Rudin associate Julia Hyman, Blackstone real estate executive Wesley LePatner and security guard Aland Etienne. The gunman then died by suicide.

Now, lawsuits are piling up from the victims’ families, blaming both the landlord and the city for the shooting. Lawyers for widow Jamila Akhter, for example, have argued that mass shootings are common enough in the United States that Rudin was reckless and negligent in not better preparing for one at its 44-story, Class-A tower. 

Rudin has filed plans to redesign and reduce the size of the office building’s outdoor plaza. Beyond that, the firm hasn’t commented on any other security measures it’s enacted to try and prevent another such tragedy from occurring. 

In the meantime, it’s possible more lawsuits will be filed before any legal conclusion is made. 

DOJ launches criminal investigation into camps owner Simad Holdings, David and Michael Shabsels

The fallout from the Shabsels brothers’ camp empire crumbling is continuing.

Simad Holdings, David and Michael Shabsels’ firm that owns around 30 U.S. summer camps along with other real estate assets, has been under fire after raising $200 million from Israeli bondholders in December, but missing its first payment in May. Michael Shabsels then said the company could not return any of the money.

Months after Simad and the brothers filed for bankruptcy, the U.S. Department of Justice is now conducting an investigation, according to a filing on the Tel Aviv Stock Exchange. Simad also mentioned it is aware of a separate civil investigation brought by the U.S. Attorney’s Office for the Southern District of New York into Paycheck Protection Program (PPP) fraud. Simad said it is cooperating with the investigations.

This comes as Simad continues offloading some of its summer camps. Warner Bros. CEO David Zaslav made a bid on Camp Mohawk last month, for example. And this week, health care mogul Daryl Hagler is also trying to acquire Camp Mesorah.