Kent Swig, Arthur Zeckendorf, Will Zeckendorf and David Burris

Kent Swig, Arthur and Will Zeckendorf and David Burris are keeping an eye out for office-to-residential conversions as New York neighborhood rezonings abound.

Office-to-residential conversions might not be expected for the quartet that controls Terra Holdings, a major residential property umbrella that in addition to everything else covers the Brown Harris Stevens brokerage where the properties are rich and bespoke.

Arthur and Will come from the legendary Zeckendorf real estate family, and developed the 15 Central Park West condo that set the bar for Manhattan luxury before the Global Financial Crisis. The family at one time owned New York addresses such as the Chrysler Building and the land on which the United Nations was built. Swig hails from a prominent San Francisco clan whose presence in the industry started with his paternal grandfather in the 1930s.

Swig said he sees an equilibrium taking shape between the amount of office-to-residential space available in New York City. To capture value on both trends, he’s seeking what some would deem less desirable properties.

“The average lease size in New York is only 8,500 feet,” Swig said, referring to the size of office leases. “So you have 500 million square feet. We’re a city of all small tenants.”

But there are only between 3.1 million and 3.7 million housing units in the city, and Swig can’t picture a scenario where people will be living in Manhattan but commuting elsewhere for work.

“I’m looking at buying commercial buildings, Class B and C buildings, and converting them into residential — I think that’s a very, very opportunistic thing,” Swig said. “I think New York’s population is rising again. I think that businesses are locating and expanding into the marketplace.”

Trillions in debt coming due and a persistently higher interest rate environment also signal opportunity, Swig said. “Where there is a crisis, I think there’s an opportunity,” he said. “So, for me, looking at commercial buildings to either renovate and keep commercial by bringing in fresh capital or converting into residential, I think is a very good opportunity.”

For Swig, one of the biggest untapped opportunities for housing outside of Manhattan, however, is Queens Boulevard, where transit options into Midtown are plentiful but new development is sparse. But that opportunity will mature only if there is more residential development through rezoning or the sale of air rights.