In the weeks since the country's largest office-to-residential conversion project was deemed at risk of collapsing, scrutiny of these complex projects, which have soared in popularity since the pandemic, has intensified. 

Three other buildings have been hit with stop-work orders following an inspection blitz carried out by officials in New York City, which has more conversion projects under construction than anywhere else. But in the other U.S. cities where this style of adaptive reuse has taken off, there is little sign that city officials are hitting the panic button.

The D.C. metropolitan area has more units being converted than any market outside of New York, according to RentCafe. In the District of Columbia, 1,900 apartments have been created out of former office buildings, and another 1,800 are under construction, Hanlon said.

“We feel a lot of confidence that our current systems are appropriate to our marketplace and the building types that are in our built environment,” he said. “We continue to frankly assess and improve across time, but we think that our systems that are in place right now are actually pretty robust and doing a good job.”

Officials in Chicago, Dallas and Denver, all of which are among the leaders in planned conversions, expressed confidence in their existing inspection processes and the ability of their staff to manage the workload as the pipeline of these projects has expanded in recent years.

Converting older buildings to luxury apartments or condos isn't a new endeavor, but the projects can be enormously complicated. In the case of the former Pfizer headquarters on 42nd Street in Midtown Manhattan, developer MetroLoft Management added 15 floors on top of a steel and glass tower that is more than 60 years old. 

Two steel beams below the new addition buckled on July 7, forcing an evacuation of the project and nine surrounding buildings. Ten city blocks were shut down in case the building collapsed, but temporary measures were put in place to stabilize the structure, and the streets have opened back up. 

The city is still investigating the cause of the buckling, but the project's structural engineer told Gothamist last month that structural supports included in the building's plans were never installed. Work is still halted, although MetroLoft has said it still expects the 1,600-unit luxury rental tower to open next year. 

Following the scare, inspectors with the NYC Department of Buildings fanned out to ongoing projects. 

On July 23, they halted work at 222 Broadway, a 788-unit project from GFP Real Estate, after discovering that two newly installed beams on the 32nd floor beneath a newly added pool deck displayed cracks in March that hadn't been disclosed. Days later, the DOB issued a partial stop-work order at SL Green's 750 Third Ave. because of steel welding that wasn't consistent with the submitted drawings, The New York Times reported.

Neither of those buildings are thought to pose safety hazards, but the coverage the orders drew highlighted how the conversation around conversions has shifted over the past month and how difficult these projects can be.

“It's a very costly process to take an office building and convert,” Newmark CEO Barry Gosin said on an earnings call last week. “The recent New York buckling of two steel girders was not helpful.”

Municipal building officials Bisnow spoke to across the country emphasized that adding floors to an existing structure, as MetroLoft did with the Pfizer building, heightens safety risks. Those types of projects are far less common outside the five boroughs.

Denver has a nearly 3,000-unit pipeline of office-to-resi conversions, according to RentCafe. 

“High-rise office-to-residential projects are still somewhat limited in number in Denver to this point and haven’t involved adding additional stories,” Foster said.

In Dallas, where nearly 4,000 units were in the conversion pipeline at the start of the year, a state structural engineer evaluates every proposal, and the city's staff “knows what they are doing,” said Rachil Hanna, building code manager with the Dallas Planning and Development Department.

“Nothing changed, because we're already doing our part,” she said when asked about the response following the Manhattan incident. “We don’t only approve based on our point of view. We get extra approval. When we approve a project, we make sure 100% that it's good to go.”

Nationwide, office conversions in the pipeline were expected to yield more than 90,000 apartments at the start of this year, according to RentCafe. That is a 28% year-over-year increase.

The projects are seen as a solution to dual crises: the record levels of office vacancy in downtowns across the country and the shortage of available and affordable housing. But they aren't for the faint of heart.

Vik Uppal, whose Mavik Capital Management is backing Washington, D.C.’s largest office-to-residential conversion, said the risk in these buildings rarely shows up until crews are already inside the walls.

“When you're going into any sort of older building, it's like performing surgery on a 100-year-old patient,” Uppal said on Bisnow’s First Draft Live podcast this week. “You could do all the checks upfront, all the diagnostics, all the diligence, everything, and it can seem like it passed the test, but once you actually open the patient up, there's so many things that you obviously don't know.”

Asked about the Manhattan conversions that have been in the spotlight, Uppal declined to second-guess the developers’ processes. MetroLoft has converted more offices to apartments than any developer in New York and has several active projects with no known incidents.

“I’m sure they did the proper diligence, and they had all of their structural and mechanical and every single factor that they looked into, but once they started construction, obviously something changed,” Uppal said. “Older buildings just have a lot of embedded risk, because there's so much that's unknown.”

Reagan Pratt, the director of the Real Estate Center at DePaul University, said he doesn't expect the near collapse to have widespread impacts on the nationwide pipeline, and he said the heightened coverage of the incident is a sign of how rarely issues arise.

“I don't think that it's endemic,” he said. “I don't think it puts a crimp [in the pipeline]. I think the biggest crimp in conversions is: Are they going to work in an economic way?”

But D.C.'s Hanlon, while expressing confidence in his department's ability to monitor projects for any issues, said it is important to learn from what went wrong on 42nd Street.

“We're clearly monitoring it and curious about how the ongoing investigation unfolds,” he said. “We don't really have findings from them yet as to what were all the factors that contributed to the failure. But of course, we are intellectually curious here at DOB, and so we see a story like that, yes, we're talking about it, and we continue to assess our systems and make improvements across time as we see fit.”