The Real Deal New York

LCOR testing market for 308-unit condo conversion at 25 Broad Street

Kent Swig wanted to go condo at the address more than a decade ago
By Will Parker | December 07, 2017 11:45AM

David Sigman and 25 Broad Street

UPDATED: Dec. 7, 2:50 p.m.: LCOR, the real estate company owned by the California State Teachers Retirement System, will test the market for a conversion of the 308-unit rental building at 25 Broad Street to condominiums, The Real Deal has learned.

The company filed the application with the New York State Attorney General’s office last month. Testing the market, known as a CPS-1 solicitation, allows real estate sponsors to gauge market interest for a potential condo offering and to begin a limited amount of marketing activity.

The application calls for all 308 rental apartments to be converted to condos at the building, which was built in 1902 and is also known as the Broad Exchange Building. If the developer follows through, it will eventually need to file a full offering plan before the units can be marketed for sale.

Representatives for LCOR were not immediately available to comment.

LCOR acquired 25 Broad Street from Kent Swig in a 2012 foreclosure auction. Swig had previously worked to convert the former office building to condominiums, but defaulted on a Lehman Brothers mortgage in 2009. LCOR, then majority owned by Lehman Brothers, brought rentals online on behalf of Lehman, leasing most of them out by 2011. In 2012, Lehman sold its 90 percent stake in LCOR to Calstrs for $820 million. That deal included 25 Broad Street. Court documents show the existing condo offering plan, which never achieved effective status, was abandoned.

The 518,000-square-foot property also received the 421g tax exemption, an incentive created to spur residential conversion of lower Manhattan buildings. In 2015, a Manhattan State Supreme Court judge ruled that two tenants had not properly notified about the exemption’s termination, entitling the tenants to a rent-stabilized apartment in perpetuity. It is unclear how many other tenants in the building have asserted their right to rent-stabilized apartments, but that could complicate the conversion process.

Apart from 25 Broad, LCOR owns the rental building at 33 Berry Street in Williamsburg.

This story was updated to clarify how LCOR came to own 25 Broad Street.