Urban Glass House neighbor may go residential, too

By Sarabeth Sanders | September 24, 2010 06:00PM

481-487 Washington Street

An old Hudson Square printing factory next door to the Phillip Johnson-designed Urban Glass House has changed hands for the first time in decades and could go residential, Eastern Consolidated broker Eric Michael Anton told The Real Deal.

The 46,270-square-foot office property at 481-487 Washington Street sold to a mid-sized Manhattan developer last week, Anton said, declining to reveal the buyer’s identity. The building, which Anton and partner Ronald Solarz had been marketing this spring as a residential conversion opportunity, traded for $13 million, or around $281 per square foot, according to public records.

In its two-and-a-half months on the market, the property drew roughly a dozen offers, mostly from developers looking to do just that, Anton said. The winning bidder, though, is considering both the more expensive, but potentially more financially rewarding, residential conversion along with an upgrade of the existing offices, he said.

It would seem that the site is a prime one for upscale residences. The building itself has high ceilings, Hudson River views and 85 feet of street frontage. It has just a few office tenants left, all of whom have leases that are set to expire by next fall. Due to a rezoning of the area in 2003, the new owner can transform the loft-style property into apartments-as-of-right. And the success of posh projects like the adjacent Urban Glass House and nearby condominiums 505 Greenwich Street, 304 Spring Street and 255 Hudson Street suggests that the micro-neighborhood is now holding its own against the likes of Tribeca and Soho.

But at the same time, those who bought into the neighborhood since its condo boom began have been spooked by a planned, $280 million Department of Sanitation garage project, which is progressing despite loud and celebrity-filled protests to derail it. A lawsuit attempting to block it altogether was dismissed earlier this year.

Urban Glass House residents, who, at 330 Spring Street, live directly across from the proposed garage site, have been among the most active campaigners — perhaps with good reason. Although the condo debuted in 2005 with healthy sales figures — by the end of the following year, it was 80 percent sold — activity slowed once the city’s proposal was unveiled in 2007 and has never quite recovered.

Earlier this summer, New York magazine reported that the Urban Glass House hadn’t yet had a single resale, and those that were listed lingered on the market and marked down their prices by up to 17 percent. By contrast, 505 Greenwich Street and 255 Hudson Street, which are further away from the garage site, have had a number of successful resales, even during the recession, in which the original buyers turned a profit.

Still, sources with knowledge of the neighborhood suggested that “the numbers [for 481-487 Washington Street] do not make sense as a commercial rental,” and that a residential conversion would be the best option.

Anton said the flurry of interest he received in the building is a sign that the New York City commercial property market is regaining its health. “The market is picking up,” he said. “I think [the sellers] got a very fair price.”