New York City’s conversion boom is revving up again, only months after a near-disaster in Midtown Manhattan halted work on a major project and sparked new safety questions about turning office towers into housing.

Since July, when two structural columns buckled under the weight of newly added floor space to the former Pfizer headquarters, the city has inspected two dozen other conversion projects.

The Department of Buildings concluded that the accident was specific to that one building, and didn’t reflect an inherent risk related to conversions. Since the accident, the department has issued initial construction permits for 16 new projects, according to Commissioner Ahmed Tigani.

That rate is considerably slower than the first half of the year. That is in part because of heightened scrutiny by lenders and developers of these projects after the Pfizer incident. But it also reflects the recent increase in interest rates that has slowed all kinds of property development.

Now, work is beginning to resume at the former Pfizer building, which is the city’s largest office-to-apartment conversion project with more than 1,600 units planned. Last week, the developer, MetroLoft, completed a delicate operation to lift sagging floors and install new steel supports to replace damaged columns.

The city is still investigating the near-collapse, which set off a scramble to stabilize the structure, evacuate nearby buildings and shut down several blocks in the heart of the city. Officials have yet to say why the columns lacked the necessary reinforcement. But now that the columns have been stabilized, full construction could resume within weeks, according to Tigani.

The Mamdani administration is counting on office conversions to help ease the city’s housing shortage, with as many as 12,000 apartments expected from such projects in the coming years. “Conversion projects play a big part of it,” Tigani said.

One new project will convert most of a new 24-story office tower in downtown Brooklyn that was completed in 2023 and never attracted an office tenant. A venture including BH3 Management and Capstone Equities, which received financing last month, adopted a conversion strategy after buying the property at a steep discount last year.

The building’s modern design makes it well-suited for conversion without major structural changes, according to Adam Falk, a BH3 principal. The venture expects to complete the conversion in 18 to 20 months, compared with the four to five years it would typically take to develop a new building from the ground up.

One-bedroom apartments in comparable buildings rent for about $5,000 a month, a contrast with the weak office demand the previous owner suffered. “The story of Brooklyn office is of a lot of pain and suffering,” Falk said.

That pain helped turn New York into the center of a nationwide boom in converting obsolete office buildings into apartments. Also fueling the trend: a strong Manhattan apartment rental market and city and state tax breaks and zoning changes that make conversions more financially attractive.

The boom was suddenly cast into doubt in July, when a structural failure at the Pfizer building caused six floors to sag. Police and firefighters scrambled to clear the area amid fears that part of the tower could come crashing down.

Even after the immediate danger passed, the accident raised troubling questions for city officials, developers and investors: Was this an isolated construction failure, or were there broader safety risks associated with turning aging office towers into apartments?

Engineers say building expansions for conversions can be done safely. But adding floors to any structure that wasn’t originally built to hold such weight requires complex engineering and careful sequencing of construction phases. If calculations are wrong, floors might be added before columns are properly reinforced and structures could fail.

Since the Pfizer incident, investors and lenders have conducted extensive reviews of existing and pending projects. They looked “more closely at the sponsor and what their experience is,” Falk said.

The Buildings Department responded by inspecting 180 construction sites associated with companies working on the Pfizer project, including 24 office-to-apartment conversions. Inspectors found three violations and issued one partial stop-work order at those conversion sites, but uncovered no structural problems posing an imminent danger to the public.

The city also issued stop-work orders at two other conversion projects, at 222 Broadway and 750 Third Avenue. Both orders have since been lifted, allowing work to resume.

The danger arose from the structural work involved in expanding the former Pfizer building, a type of construction that isn’t unique to conversions.

“It wasn’t specific to the fact that it was office-to-residential conversion,” said Tigani. “What we had here was a complex enlargement of an existing building.”The city allowed MetroLoft, New York’s most experienced converter, to resume work on some lower floors of the project not involved in the near-collapse in September. The firm declined to comment.

While safety concerns have eased, the business case for conversions has become more complicated. Elevated interest rates and construction costs are making projects harder to finance. Meanwhile, a recovering office market is giving some building owners reason to reconsider converting their properties into apartments.

“The economics of the office market are starting to tempt owners to hold their ground,” said Melanie O’Brien, JLL’s head of research for the New York region.

The pace of new conversions is likely to slow in the coming years as developers exhaust the supply of buildings best suited for redevelopment, according to Ran Eliasaf, founder of Northwind Group, a credit fund manager active in financing conversions.

But for now, Northwind remains active in the market. The firm recently financed two conversions and has two more loans in the works for Midtown projects.

“There’s still a big shortage of apartments in Manhattan,” he said. “Conversions are a great way to deliver units fast.”