Macklowe says One Wall Street will now mostly be condos

Sponsors will now put in more equity, seeking smaller construction

New York /
Mar.March 27, 2017 04:05 PM

Harry Macklowe is shifting from rentals to condominiums at One Wall Street amid a weakening luxury rental market.

Macklowe TRData LogoTINY had initially planned the Downtown office-to-residential conversion to be 65 percent rental apartments, but on Monday he told Bloomberg the project will now be all or mostly condo.

Apartments rents have been falling and concessions have been rising across Manhattan. But the state of the condo market isn’t rosy either, amid a surge in new supply at the high end. “There’s no question about it: The market is slower, more careful in selecting, and of course, the buyers all want to negotiate, test and probe the market,” he said. Macklowe hopes to compete by offering apartments that are slightly cheaper than the nearby new development competition.

“Overproduction is OK because it can create order out of chaos,” he said. “There is now certainty in the market. We know where the price floors are. We know that the demand for $10,000- or $12,000-a-foot units is very slow, that the appetite for that is limited and therefore, the production of that housing should be limited. We also know that there’s a great need for housing in the $2,500- to $3,000-a-foot range.”

Condo units in the building’s top third will ask $2,800 to $3,000, while lower floors will ask $2,000 to $2,500, Macklowe told Bloomberg. A Whole Foods store will anchor the retail section of the property, and the developer said two retail leases totaling 90,000 square feet of space are pending.

Macklowe is still in the market for a construction loan to fund the conversion, and said he is in talks with three lenders. The developers was initially looking to borrow $1 billion, but now said he is seeking a smaller loan alongside a bigger equity buffer. [Bloomberg]Konrad Putzier


Related Articles

arrow_forward_ios
Here are the week’s top luxury sales
Here are the week’s top luxury sales
Here are the week’s top luxury sales
Clockwise from left: John D. Rockefeller, Izzy Englander, Steven Mnuchin, David Koch, Jacqueline Bouvier, and William Zeckendorf (Credit: Getty Images and StreetEasy)
For 15 years, David Koch lived at the world’s “richest building”
For 15 years, David Koch lived at the world’s “richest building”
Here are the week’s top luxury sales
Here are the week’s top luxury sales
Here are the week’s top luxury sales
56 Leonard Street (56 Leonard Tribeca and StreetEasy)
$50M penthouse at 56 Leonard Street goes into contract
$50M penthouse at 56 Leonard Street goes into contract
Madison Realty Capital's Josh Zegen, 1580 Nostrand Avenue and Hello Living CEO Eli Karp (Madison Realty Capital, Hello Living)
Madison Realty Capital aims to foreclose on Hello Living’s 1580 Nostrand Ave
Madison Realty Capital aims to foreclose on Hello Living’s 1580 Nostrand Ave
Clinton Street condo edges Park Slope townhouse in Brooklyn sales’ slow week
Clinton Street condo edges Park Slope townhouse in Brooklyn sales’ slow week
Clinton Street condo edges Park Slope townhouse in Brooklyn sales’ slow week
45 South Grove St in East Orange (Rendering via Progress Capital)
Hero Construction lands $20M loan to build East Orange apartments
Hero Construction lands $20M loan to build East Orange apartments
The rise of e-commerce, fueled by the pandemic, has created unprecedented demand for cardboard-producing facilities. (iStock)
Cardboard demand could fuel an industrial real estate boom
Cardboard demand could fuel an industrial real estate boom
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...