NYC Developers Eye Garment District Conversions After Rezoning Push

• Developers like Marty Burger and Andrew Heiberger are moving early on office-to-residential plays
• A 107-unit conversion at 29 W 35th Street is one of the first projects advancing
• High costs and tax rules are still slowing broader deal activity

What the Rezoning Unlocks for Developers

The Midtown South rezoning cleared the way for 10,000 new housing units across 42 blocks, finally allowing residential use in a long-restricted area of Manhattan.

Developers quickly started circling the Garment District, with early movers locking in properties before approvals were finalized. As Burger put it,

 “We put the property under contract and made the bet that the rezoning was going to go through.”

What Early Projects Look Like on the Ground

The conversion at 29 West 35th Street highlights the current playbook. The 12-story office building is being transformed into 107 apartments, including affordable units, with a relatively fast timeline.

Conversions are winning on speed and cost. Burger made that clear:

“You wouldn’t be able to build this without 467m. The numbers just wouldn’t work.”

What’s Holding Back More Development

Interest is strong, but deals aren’t closing at scale yet. The biggest issue is feasibility, as construction costs and labor requirements continue to pressure returns.

Developers say the math is still tough, especially with wage rules tied to incentives cutting into margins.

What This Means for NYC Investors

The Garment District sits in a highly connected part of Manhattan, near Penn Station and major neighborhoods, giving it strong long-term upside.

Still, this will be a slow-build story, with early movers betting that today’s constraints will turn into tomorrow’s opportunity.